Auto leases can be bought and sold
By Lucy Lazarony • Bankrate.com

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 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. Who knows what the first driver did to the car before you came on the scene?

"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 site.

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 well.

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.

-- Updated: Nov. 21, 2001