Lease take over is fast becoming a good way to drive a car if you don't
have a lot of money. There's no secret to doing it. It's just that this type of leasing hasn't been around for long.
It works like this: a leaseholder, due to some circumstances in his life, decide to exit a lease. He markets his car lease to buyers looking for a short term lease assumption (also called lease trade or a lease exchange) at sites like Swapalease.com
Swapalease is the leader in online lease assumption. John Sternal, vice president of marketing communications for LeaseTrader, says that his site facilitated approximately 35,000 lease swaps in 2007. Swapalease facilitated 6,000 swaps last year, according to Swapalease's Executive Vice President of Operations Scot Hall. The sites have grown primarily through word of mouth, Internet searches and the media. Even many car dealers aren't aware of these sites but that should change soon.
To lease a car
directly from a dealer probably has its own advantages but with lease take over, you may be able to get a better deal and more benefits if you simply take over a prior lease from an individual. Because an automobile lease are for a relatively short period of time, it can be difficult to exit a lease early and return the vehicle. Many dealers will sock you with early termination fees, or insist on all of the remaining lease payments. They will not consider any reason from you, whether you lost your job, or if you have to move out of state to take care of your ailing parents on the other side of the country. Auto lease assumptions allow you to take over the rest of the lease term from the individual, including the monthly payments, so the lease contract is fulfilled and the person is not hit with additional fees.
An auto lease assumption has several advantages over traditional leasing. First of all and most importantly, you will not have to come up with a down payment in order to start driving the vehicle. If you just graduated college, has been in your job a few months, has good enough credit but little money for a down payment, all you have to do is lease take over, or assume, the monthly lease payments of that leaseholder. If a person paid $1500 down and has a $300 monthly payment, you just have to take over the monthly payment portion, which creates a big savings.
Another distinct advantage is that in assuming the person's lease, you
now assume a shorter and more flexible lease term. A traditional lease could be from three to five years. However, with lease take over, the lease term is normally just two years, and in some cases you can get an assumption with just one year left on the lease. That way,you won't be stuck with a vehicle you might be tired of, and will be ready to trade in for a new one.
This situation creates good opportunities for somebody who is a student with a couple years to go before graduation, or a graduate student. But practically anybody with another unique situation can benefit.
Auto lease assumptions are relatively easy to initiate and complete. Swapalease.com
will help guide you through the transfer process. The online sites are usually the best place to start.
The first thing to do is to get pre-approved for a lease assumption. Like getting a new lease, lease take over does require relatively good credit. If you are shopping through a website, you will normally be able to fill out an application online. Like getting pre-approved for a home loan before you start house shopping, get pre-approved for auto lease assumptions first will give you the most choice and flexibility.
Financing for new or used vehicles purchased from a franchised dealer
Loans to refinance your current auto loan
Online loan application and approval process
Online account access
Next, choose the car at Swapalease.com
You will normally get to see photos first, which will help you make your initial decision. If you are live long-distance from the seller, you can usually make arrangements to get the vehicle inspected for you, the third party companies who help facilitate the assumption will often offer an inspection service. It's important that you do that inspection because you don't know him and might inherit the dings and dents and any serious troubles of his own making. You might pay for those at lease termination.
Once you and the seller agree on the vehicle, the seller will initiate the transfer. Your credit application is sent to the original leasing company,and when approved, they will create the new leasing documents that both you and the seller need to sign. Once the leasing company has verified everything and the new paperwork is issued, the seller is notified, and you will make arrangements to receive the vehicle. Lease take over is relatively simple.
Some 80 percent of leases can be transferred completely with no strings attached but approximately 10 percent of leasing companies require the original leaseholder to retain some liability for the vehicle even after it is transferred. Nissan /Infiniti and Honda /Acura fall under this category. Whether the seller can even facilitate a lease transfer financed by Honda Financial Services depends on where he lives, so check with the company before attempting to assume a Honda/Acura lease swap.
Another 10 percent of leasing companies don't permit leaseholders to exit a lease
at all: usually bank-based companies such as Chase Auto Finance and Huntington Bank Leasing, or smaller credit unions. This is an important factor to remember if you opt for lease take over in the future.
Lease take over is becoming popular but just use your common sense. Assuming lease from a relative or a friend should be your best option. But if that's not possible, just be careful. Beware the wear and tear. A key concern is end-of-lease charges, including those for wear and tear. When you take over a lease, you're responsible for all the wear and tear on that vehicle during the entire leasing term.
It's important to study the leasing deal carefully. When you go to Swapalease.com
to look for a car, you will see "Incentive" at the car profile to entice lease buyers. A high cash incentive being dangled could be a sign that the lease seller is very motivated to get out of a car lease for some reason. Be careful.
If you're looking for a super-cheap, short-term lease deals you don't want to end up taking on someone else's troubles. Finding the right match minus the troubles would require some very careful analysis.
Lease sellers pay most of the fees charged by Swapalease.com
and they usually take care of the lease transfer fees charged by the finance company as well.
The leasing company must approve the credit of a person who will be picking up the payments. So if your credit is not good, lease take over might not be for you. Other leasing companies also charge credit application fees but many lease sellers will be willing to pick up this fee as well. Now that everything is in place, call your auto insurance agent to have the car covered before you drive away with the car.
One final note: transferring a lease contract is a legal procedure, and like buying a new car, there's no turning back once you've signed the paperwork. Hoping your lease take over