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3 minutes read. 13th October, 2022.
Authored by Rebecca Betterton Written by Auto Loans Reporter
Rebecca Betterton is the auto loans reporter for Bankrate. She is a specialist in helping readers in navigating the ins and outs of securely borrowing money to purchase a car.
Edited by Rhys Subitch Edited by Auto loans editor
Rhys has been writing and editing for Bankrate from late 2021. They are committed to helping readers to take control of their finances through providing concise, well-researched, and well-studied information that breaks down otherwise complicated topics into bite-sized pieces.
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In a time when the market for cars is struggling to keep up with the shortage of inventory and a lack of cash, taking over lease payments can be an ideal option to get behind the wheel. Third-party websites can help you connect with someone looking to terminate their lease earlier. But since lease contracts generally run for up to three years, you may have to buy the car -- or return it to the dealer before you're in a position to do so. Would a lease-to-own takeover be a good idea?
Based on your situation depending on your circumstances, borrowing someone else's lease can be a smart option as it could come with lower monthly costs and more options for vehicles compared to purchasing.
Benefits of a lease takeover assuming a lease has clear benefits in the event that you want to purchase a more modern vehicle for a brief period. Car availability: With car buyers holding onto their new vehicles for the typical 6.5 years, as per the most recent data from and leases usually last for two or three years, it can be challenging to find a good deal on a newer car that isn't the current model year. It is possible that you'll find a reasonably new vehicle with a lease assumption. A short-term lease whereas the typical leasing contract lasts two or three years, a lease assumption ends sooner. This allows you to test drive a car without signing an extended-term contract. It is rare to discover this type of timing at traditional leasing outlets. Cash incentives Many drivers want to take their car off their hands when they are in a lease assumption situation. It's not uncommon for the initial lessee to provide a cash bonus. They might also offer to pay for any transfer fees that a leasing company may charge and could help you save many hundreds. Discuss with the leasee to negotiate the best deal. Pay less monthly if the initial lessee has excellent credit and has made a significant down payment, it's probable that the monthly installment isn't too high. Since you'll take on that monthly installment and will be able to benefit from the conditions. Advantages of a lease assumption Low car payments and the flexibility offered by leasing a car for a short period of time could be appealing but prior to signing the lease, be aware of potential dangers. There is no renegotiation of the lease. The lease you take over is the lease you sign. You will not be able to negotiate lease conditions that the initial lessee agreed to. If their credit score was low and you were unable to negotiate, you could be in a position to be paying a greater monthly payment than you would have received when you signed a lease yourself. It is also possible to have an increased lease-end price than what you'd otherwise pay. Limited mileage Taking over a lease means that you be required to adhere to the mileage limits originally set in the lease agreement. If you exceed this limit, it could cost you -the penalties are between 10 and 25 cents per miles. Try and estimate how many miles you will drive prior to the lease expiring to ensure you don't have to pay a penalty. Also, be sure to ensure that the original leasee hasn't already been charged costs for mileage overage. Costs for wear and tear that could be high if the previous driver did not keep the automobile in good condition, you'll be responsible for the wear-and-tear fees. Just like any used car take the vehicle to inspect it in person and have it inspected before you sign a contract to take on the lease. If the vehicle is showing significant wear, see if the original lessee will be able to cover the cost as part of your transfer. Additional fees There are three major charges that are associated with a lease takeover: lease transfer or credit application . According to Swapalease it is possible for the cost to range from $395-$895. Make sure you are aware of the details of these charges prior to signing your lease's assumption. How to assume the car lease decided to take on the lease, you have several options to choose from. Lessees who wish to hand over their leases can use websites like Swapalease, LeaseTrader and QuitALease to locate someone who will take on that role. It is also possible to reach out to the leasing company. They could be able offer suggestions or in establishing a relationship with a potential lessee. Even though the lease's terms will be determined by the original credit of the lessee however, your credit will be taken into consideration. Be prepared to bargain with the lessee about any potential cash rewards as well. The final word: If you decide to take over a lease, keep your mind in the forefront that the obligation you are taking over is greater than a typical auto lease due to the background of the initial driver. The lease will be liable for the remainder of the costs of the vehicle, including any damage or costs incurred by the original lessee. Shop around and compare different alternatives before signing any agreements. Find out more
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Written by Auto Loans Reporter
Rebecca Betterton is the auto loans reporter for Bankrate. She is a specialist in helping readers to navigate the ins and outs of securely taking out loans to purchase 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 take control of their finances through providing clear, well-researched data that breaks otherwise complex subjects into digestible pieces.
Auto loans editor
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