The Bankrate promise
At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict , this post may contain references to products from our partners. Here's an explanation for .
As the car market struggles to catch up with inventory issues, taking over car lease payments could be a good option to get behind the wheel. Third-party websites can help you connect with someone looking to end their lease early. But since lease contracts typically last for two or three years, you may need to purchase the vehicle — or give it back to the dealer — before you’re ready.
Advantages of a lease takeover
Assuming a car lease has clear benefits when you are looking to drive a newer model car for a short period.
With car buyers holding onto their new vehicles for an average of 6.5 years, according to the latest data from IHS Markit, and leases typically lasting two or three years, it can be challenging to find a good deal on a newer car that isn’t the current model year. But it is likely you can get a fairly new car through a lease assumption.
While the average leasing contract lasts two or three years, a lease assumption ends sooner. This shorter period allows you to test drive a vehicle without having to sign a longer-term contract. It is rare to find that timing available through traditional leasing outlets.
Many drivers are eager to get their vehicle off their hands in a lease assumption scenario. It is not uncommon for the original lessee to offer a cash bonus. They may also offer to cover any transfer fees a leasing company charges, which can save you hundreds of dollars. Negotiate with the lessee to get the best deal possible.
Lower monthly payments
If the original lessee has excellent credit and made a large down payment, it is likely that their monthly payment is low. Since you will be taking on that monthly payment as-is, you will benefit from their terms.
Disadvantages of a lease assumption
Low car payments and the flexibility of a short-term car lease may be tempting, but before you assume a lease, be aware of the potential pitfalls.
The lease you take over is the lease you get. You will not be able to negotiate the lease terms the original lessee agreed to. This means that if their credit score was low, you might be stuck with a higher monthly payment than you would have received getting a lease yourself. You may also have a higher lease-end purchase price than you would otherwise get.
Taking over a lease means that you will have to stick to the original mileage limits on the car lease agreement. Going over this limit could cost you — overages range from 10 to 25 cents per mile. Try and estimate how many miles you will drive before the lease expires to make sure you won’t have to pay a penalty. And of course, make sure the original lessee hasn’t already incurred mileage overage fees.
Potentially high wear-and-tear costs
If the previous driver did not maintain the vehicle, you will be stuck with the wear-and-tear fees. Just like any used car, see the vehicle in person and have it inspected before you agree to take over the lease. If there is significant wear, see if the original lessee will cover the fees as part of your transfer.
There are three primary fees that come along with a lease takeover: lease transfer, credit application and disposition fees. According to Swapalease, you can expect these fees to cost anywhere from $395 to $895. Be sure to find out the specifics of these fees before agreeing to the lease assumption.
How to assume a car lease
If you’ve made the decision to assume a lease, there are a few options available.
Lessees who want to hand over their leases turn to websites like Swapalease, LeaseTrader and QuitALease to find someone to assume that role. You can also reach out to the leasing company. They may be able to give recommendations or even help connect you with a potential lessee.
Although the terms of the lease will already be determined by the original lessees’ credit, your credit will still be considered. Be prepared to negotiate with the lessee for any potential cash bonuses as well.
The bottom line
If you do decide to assume a lease, keep in mind that the responsibility you are taking over is greater than a typical auto lease due to the history of the original driver. You will be responsible for the rest of the payments on the car, including any damage or fees incurred by the original lessee. Shop around and compare different options before signing any agreements.