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Signing a car lease contract is somewhat similar to getting married: If you suddenly come to decision to end the marriage, it could be very costly. The penalties and early termination fees may have you reconsidering, leaving you stuck in bad marriage with your car. Your auto dealer may try to ease the anxiety of the situation by suggesting that you trade in your leased vehicle for a new vehicle. But even that could possibly garner penalties and add more cost to the new vehicle.
So what options are you left with? It’s possible that you hold equity in your leased car and thus have the ability to make an early exit and even have some money to keep. Using a lease-trading website is your other option.
These businesses have a simple concept: “Sellers” (the lease holders) make listings online of their cars and the vehicle payment details; the “buyers” (people seeking a lease to assume) quest for listings that fit their car needs. We help two parties and facilitates the legal transfer of the lease.
Why Would My Car Lease Attract People?
There are several reasons your current leased vehicle might attract the attention of other people:
- Some people prefer lease-swapping because of the flexibility it provides, allowing them to change cars every year or two.
- They might need a car for only a short period of time and don’t want the commitment that comes with a longer lease agreement.
- They look to evade heavy down payments.
- Life circumstances have prompted the need for a different type of car or an extra one.
- A new leaseholder might have an interest in purchasing the car at the lease’s end for a planned price.
Even if your car has current monthly lease payments that are higher than what is typical for your car, you can still make it an attractive offer for a potential new owner. For example, maybe the car has low mileage or you can make a more enticing deal by offering a lower monthly payment through an up-front cash incentive.
What Are The Costs?
Right now we are completely free! No third party fees! Banks charge an array of fees for making the transfer. The majority of the costs are put on the person assuming the lease. On the bright side, even with these expenses in place, the total cost is significantly lower than penalties from early termination.
Can Everyone Transfer Leases?
It is usually possible to make a lease transfer with no complications or strings attached. But even after a lease transfer is made, about 20 percent of leasing companies require the original holder of the lease to keep some liability for the vehicle. This indicates that the originator of the lease stays on the contract and the original leaseholder can be held financially liable for balances left unpaid. These could be results of lease-end fees or extra mileage charges. Essentially, the party who originally signed the lease is like a co-signer on the loan. If the second person fails to pay on the loan, the bank proceeds to retrieve the money from anyone else whose name is on the contract.
BMW, Infiniti, and Nissan are manufacturers that have a post-transfer liability requirement. Manufacturers such as Honda and Acura sometimes require it depending on your state of residence. However, the market for second leasing is moving away from this form of liability.
There are a relatively small amount of leasing companies that don’t even permit transfers at all. These include banks and financial institutions such as Chase Auto Finance or credit unions. This is an important factor to consider before signing a lease. Having a leasing company that allows transfers affords you more pliability if you need to end the lease early.
Lease Transfer Checklist
Although we will assist you with many facets of the transfer, a lease transfer is a legal procedure, and just like buying a new car, there’s no backing out once the deal is done. So it is very important to review the requirements and stipulations of the lease. Here are some key questions to ask so you can protect yourself if you want to make a lease transfer:
- Does your present lease company permit transfers?
- Are you willing to retain some responsibility after the lease transfer?
- Has the lease trading company verified that the person seeking lease assumption has good credit?
Lease Assumption Checklist
If you are interested in accepting someone else’s car lease, here are the important questions to ask yourself:
- Does the car’s vehicle history report list any major accidents or repairs?
- Have you carefully reviewed and gained thorough understanding of the original lease agreement?
- Is the car of your interest in the possession of a dealer or another consumer? The lease trading company can give you this information. It is critical to know who you are dealing with.
- Will the remaining lease term extend past the warrant period of the vehicle, leaving you without warranty?
- Have you reviewed the original contract to see if you’ll be considered responsible for costly charges of ending the lease?
- Can you lease a new car for essentially the same price as the vehicle you’re thinking about getting on a lease trading site? With some of the deals offered these days, it’s sometimes better to get a new car.
- Can you easily get an inspection for the car by a mechanic?
A “Win, Win” for Consumers and Automakers
Online car lease trading offers more freedom to leaseholders than they’ve had in the past. More automakers have come onboard to the idea of allowing their customers to trade leases. It especially makes sense for high-end manufacturers such as BMW and Mercedes-Benz, which has a high percentage of new cars being leased. Lease transfers allow these companies to get brand new customers while creating a new relationship with the older customer.