What is a Lease Takeover?
A lease takeover for a car is basically a lease transfer which is an exchange between two people; the lease “seller” transfers the vehicle lease over to the lease “buyer” In most cases a lease transfer takes place when the “seller” wishes to escape their lease early. The individual searches for someone to take over the lease contract and take responsibility for the vehicle. The lease buyer (person who takes over the lease) would obtain the conditions of the lease and would receive the car. Lease takeovers are usually a great way to have a nice, new car as they tend to be a great cheap option. However it is important to be careful and do your full research when looking to take over a lease as it can be more expensive on rare occasions. When looking to take over a lease keep in mind to do research and look closely at the following topics; the leasing contract, the current condition of the car, the terms of the lease, and the terms the lease-seller is offering. Being hesitant on spending too much on a lease takeover is understandable as it can be confusing for some people. With that being said, Lease Marketplace works to ensure you as the buyer are getting the best deal possible. To provide you with more information on taking over a lease, here are some keywords and concepts that are essential to understand to help you with your lease take over process.
- Terms: The length of the leasing contract with the current lender. As lease “buyer” you take over and are responsible for the part of the term that is remaining from the original lease
- Residual Value: This is the value the car holds by the end of the Term. This value has already been decided by the leasing company. It is how much you as the lease buyer will have to pay by the end of the Term if you want to keep the car by then. *Be sure to research if the contract allows you to either return the car or purchase it by the end of the term.*
- Market Value: The private resale value. This value can be lower or higher than the Residual Value, it just depends on how much the car is going for on the market at that specific time.
- Transfer Fee: These are extra fees that might be associated when the lease is being transferred from the lease “seller” to the lease “buyer”
- Kilometer Limits: This is the limit of kilometeres that can be driven on the car by the end of the Term, every car has kilometer limitations and these are annually divided. The average amount of kilometers range from 20-25,000 every year. If you go over the kilometer limit you will be charged.
- Wear and Tear: This term refers to how much damage the car leasing agency allows by the end of the Term. If your car has damage that is not considered “normal” by the agency, you will be responsible for paying for any repairs. *Make sure to read the lease contract carefully to prevent any extra charges for things that can be easily avoidable.*
Why Taking Over a Lease Will Benefit You
Taking over someone’s lease can be a good way of “test driving” some of your dream cars for a short term, without having to worry about the payments for multiple years. One of the most intimidating parts about owning a car can be the hefty down payment, however with a lease takeover, you can dodge the whole down payment aspect and expect to see lower start-up costs. In addition, a lease take over will result in lower monthly payments for your vehicle as you save money by avoiding the monthly payments of a car loan. In a lease, an individual is only responsible for paying for the depreciation of the vehicle for the length of time you are using it. Furthermore, you may be offered a lease incentive by the lease seller which is always helpful. Lastly, if by the end of the Term the car has a higher Market Value than Residual Value, when your lease is up, you might be eligible to sell it and make profit after buying it out. All of the examples presented are great ways you can save money and get a vehicle with the help of a lease take over.