What is a Car Lease Takeover?
Want to lease or rent a new (or new-ish) car for a short period of time? A car lease takeover or “lease swap” lets you take over a leased vehicle as you make the remaining payments on it.
While this type of car lease has some clear benefits, be sure to read the fine print so you don’t end up paying more than you thought you would.
Key takeaways
- A car lease takeover is a way for an original buyer to transfer a contract to a new lessor.
- This can be a good way for you to lease a car for a short period without having to negotiate a new contract.
- For better or worse, you will become liable for the terms of the original car lease.
- Since a lessor swapping out a car lease may be a desperate seller, you may be able to score some additional incentives.
What is a car lease takeover?
A car lease swap is pretty straightforward: Someone with a regular car lease will advertise or list the lease for takeover. If you’re interested, you’ll need to go through an application process and credit check, although you won’t be able to change the terms of the lease.
Once you’re approved, you’ll take possession of the vehicle and assume responsibility for the rest of the payments, as well as the insurance for your leased car.
Pros of a car lease swap
A car lease takeover may seem a little unconventional, but it can save you money in various ways.
No down payment required
When you take over a lease, you’re only on the hook for the remaining payments. The original leaseholder is — or was — responsible for the down payment, if any. This can save you a lot.
Potential cash incentives
If someone lists their lease for takeover, they’re probably eager to get out of the contract. This can work to your advantage. You may even be able to negotiate a cash payout in exchange for assuming the lease or get the original leaseholder to cover any fees for the transfer.
Vehicle may still be under warranty
Most new-car leases expire while the vehicle is still under the manufacturer’s original warranty. This is something you’ll definitely want to check if you’re assuming a lease, since a warranty will save you a lot if the car ever needs any maintenance.
Cons of a car lease swap
Leasing a car isn’t the same as owning a car, as you’ll need to follow rules about mileage and be responsible for wear and tear. And with a lease swap, you don’t get to negotiate these terms.
Wear and tear on vehicle
At the end of a lease, the finance company will reclaim the vehicle and probably try to sell it, so most leases have strict wear-and-tear clauses. Even if the original leaseholder was the one who wore down the tires or got various dings or scratches, you are held responsible for them at the end of the lease.
May have to pay transfer fees
When you take over a car lease, you may have to pay for a credit check. If you’re using a website for the lease swap, you may also have to pay a membership or account fee. Together, those fees may amount to about $35 to $60. You should also expect to pay transfer fees to the finance company, which can be as much as $650, although you may be able to bargain this down.
May come with mileage restrictions
Many car leases limit annual mileage to 10,000 or even less, although you can sometimes see higher limits. If you exceed the mileage restriction, you might have to pay 10 cents or more per excess mile. Check to see how much the original leaseholder has driven to make sure you won’t owe expensive overage fees at the end of the lease.
Won’t be able to negotiate terms of monthly payment
When you take over an existing car lease, the contract has already been negotiated. It could be a poor deal, especially if the down payment was small. Unfortunately, you’re stuck with whatever terms are already on the lease.
How to swap a car lease
How about if you’re the one who wants to get out of a car lease early? Here’s how to do your own car lease swap:
- Make sure your lease is eligible for a swap. Some contracts prohibit lease takeovers.
- Advertise your car lease. You can list it on a website like leasetrader.com or just publicize it on social media yourself.
- If you’re contacted by a potential buyer, connect them with your leasing company.
- You can also negotiate with the interested party, enticing them to take over the lease by helping cover transfer fees or offering a cash incentive.
- Wait for the new buyer to be approved — usually, the leasing company will require a credit check.
- File the necessary paperwork with the leasing company to make the transfer official.