Auto leases can be bought and sold
Should you take advantage of someone else's financial
pain and take over a lease?
You might be able to pick
up a short-term lease with wickedly low monthly payments and pocket
some cash, too.
Folks desperate to bolt
from their leasing agreements often sweeten the deal with cold,
hard cash. Incentives of $500 to $1,000 are common.
So you could come away
with a new set of wheels for no money down and enough cash in your
pocket for your first few payments. Talk about a sweet auto deal.
Still, while taking over
someone's lease can be a great way to pick up some cheap, short-term
transportation, there are also plenty of risks, so you'll need to
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.
Who knows what the first driver did to the car before you came on
"One thing I would question
is how well-maintained that vehicle is if, No. 1, the person can't
make the lease payments and, No. 2, if the person really wants to
ditch the car," says Jack Nerad, author of The
Complete Idiot's Guide to Buying or Leasing a Car.
Dents and dings aren't
the only things you'll need to worry about or possibly pay for.
"Was there a leak in the
trunk and the wiring shorted out?" asks Douglas Walsh, senior counsel
in the attorney general's office of Washington state. "Did kids
spill milkshakes in the back seat?"
Has the odometer been tampered with in any way?
The list goes on and on.
Before taking over a lease,
it's a good idea to have the car inspected by a mechanic. Remar
Sutton, president of Consumer Task Force for Automotive Issues,
urges people to take the car to the dealership where it will be
returned at the end of the lease.
"Ask them if there's going
to be any charges for wear and tear," Sutton says. "Try to get them
to commit to that before you take over the lease so you'll know
what you're getting into."
Read the fine print
You'll also want to study the leasing deal carefully. Don't be distracted
by that cash dangled by the former driver.
Does the monthly payment
fit your budget? Is
there enough mileage left in the lease to meet your driving needs,
or will you get stuck shelling out big bucks in excess mileage charges?
How long is the car's warranty?
Will it last for the entire lease term or will you have to make
repairs out of your own pocket?
"Some leases are really
crummy," Walsh says. "Those are the ones people want to get rid
of. Nobody in their right mind would want to take on one of those."
Remember, you're looking
for a super-cheap, short-term leasing deal. You don't want to end
up taking on someone else's troubles.
"Finding the right match
would require some very careful analysis," Walsh says.
Find a deal
Where do you find leasing customers eager to hand over the keys
to a car that you'd like to drive? The ideal situation would be
to take over the lease from someone you know and trust, such as
friend or family member.
Otherwise, you'll need
to hit the classifieds section of your newspaper or hop online.
Web sites such as Swapalease.com and Leasetrading.com bring lease
"buyers" and lease "sellers" together. These sites also promise
to speed along the lease transfer process, which can take anywhere
from two weeks to two months.
At Swapalease.com, you
can browse the leasing offers for free, but you'll need to pay a
$19.95 registration fee to be considered as a serious lease buyer.
Leasetrading.com does not charge fees to lease buyers that use its
Lease sellers pay most
of the fees charged by these online sites, and they usually take
care of the lease transfer fees charged by the finance company as
The leasing company must
approve the credit of a person who will be picking up the payments.
So if your credit is not up to snuff, you can forget about taking
over a lease. Some leasing companies charge credit application fees.
Many lease sellers will offer to pick up this fee as well.
Let's say you've got good
credit and you've found a good short-term leasing deal. You've had
the vehicle inspected and everything looks fine. The next thing
to worry about is auto insurance. You'll probably need to boost
your insurance to cover driving a leased vehicle.
All these things need to
be in place before you can drive away with the car.