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3 minutes read. Published October 13, 2022
Written by Rebecca Betterton Written by Auto Loans Reporter
Rebecca Betterton is the auto loans reporter for Bankrate. She has a specialization in helping readers to navigate the details of borrowing money to purchase an automobile.
Edited by Rhys Subitch Edited by Auto loans editor
Rhys has been writing and editing for Bankrate since late 2021. They are dedicated to helping their readers gain the confidence to manage their finances through providing concise, well-researched, and well-studied information that breaks down otherwise complex subjects into digestible pieces.
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The car market is struggling to keep pace with supply issues and the need to take over lease payments might be an ideal option to get behind the wheel. Third-party websites can help you connect with someone looking to end their lease early. However, since lease agreements typically last for up to three years, you may need to purchase the vehicle or return it to the dealer before you’re prepared. Is a lease takeover an ideal idea?
If your circumstances permit the possibility of the option of taking over someone else’s lease can be a smart choice as a lease may offer lower monthly fees and more options for vehicles compared to buying.
Advantages of a lease takeover Assuming a car lease has clear benefits when you are looking to drive a newer model car for a short period. The availability of vehicles With car owners holding onto their new vehicles for the typical 6.5 years, as per the most recent data from and leases generally last for two or three years, it may be difficult to find a good deal on an older model that isn’t the current model year. However, it’s likely that you’ll find a reasonably new car through a lease assumption. A short-term lease whereas the typical lease lasts between two and three years and a lease assumption is typically sooner. It allows you to try out a car without the need to sign an extended-term contract. It is rare to find that timing available through traditional leasing outlets. Cash incentives Many drivers want their vehicle out of their possession in a lease assumption scenario. It is not uncommon for the original leaseholder to offer cash incentives. They may also offer the possibility of covering any transfer fee that a leasing company may charge, which can reduce the cost by thousands of dollars. Talk with the leasing company to negotiate the most favorable deal. Pay less monthly if the initial lessee has excellent credit and made a large down payment, it is likely that their monthly cost is not as high. Since you will be taking on the monthly payment as-is it is possible to take advantage of the terms. Disadvantages of a lease assumption Car payments that are low and the flexibility offered by a short-term car lease may be tempting, but before you assume a lease, be aware of potential risks. A no-renegotiation lease The lease you assume is the lease you get. You will not be able to negotiate the lease terms that the original lessee agreed to. If their credit score was not high and you were unable to negotiate, you could be stuck with a higher monthly payment than you would have received getting the lease yourself. It is also possible to have the option of a higher purchase price at the end of your lease than what you’d otherwise pay. A limited mileage lease means that you will be required to adhere to the original mileage limits on the car lease contract. If you exceed this limit, it could be costly -Overages can range from 10 to 25 cents per mile. Estimate the number of miles you’ll travel before the lease expires to make sure you won’t have to be penalized. Of course, you must make sure the original lessee has not already paid costs for mileage overage. Costs for wear and tear that could be high if the previous driver did not take care of the car, you will be stuck with the wear-and-tear charges. Just like any used car take the vehicle to inspect it on the spot and ask to have it examined prior to signing over the lease. If the vehicle is showing an excessive amount of wear, check whether the original leaseholder will be able to cover the cost in the course of your transfer. Additional fees There are three main fees that come along when you take over a lease: leasing transfer as well as credit application . According to Swapalease it is possible for the cost to range between $395 and $895. Make sure you know the details of these charges before committing to an assumption of lease. How do you assume a car lease If you’ve made the decision to assume the lease, you have many options available. Lessees who want to hand their leases to others can go to websites like Swapalease, LeaseTrader and QuitALease to locate someone who will take on the responsibility. You can also reach out to your leasing firm. They might be able to give recommendations or even help to connect you with a prospective lessee. Although the terms of the lease will depend on the initial credit of the lessee however, your credit will be assessed. Make sure you discuss with the lessee any cash bonus opportunities and bonuses. The main thing to remember is that if you decide to take over the lease, bear in mind that the liability that you take on is greater than a typical auto lease due to the background of the initial driver. The lease will be liable for the remaining costs of the vehicle, including any damage or fees incurred by the original lessee. Look around and evaluate different options prior to signing any contracts. Learn more
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Authored by Auto Loans Reporter
Rebecca Betterton is the auto loans reporter for Bankrate. She has a specialization in helping readers to navigate the ins and outs of securely using loans to buy an automobile.
Edited by Rhys Subitch Edited by Auto loans editor
Rhys has been writing and editing for Bankrate from late 2021. They are dedicated to helping their readers gain the confidence to control their finances with clear, well-researched information that breaks down complex topics into manageable bites.
Auto loans editor
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