Assuming a car lease means that you will be taking over an existing vehicle lease from the current lessee and it also means that you will take all of the responsibilities involved, including: monthly payments, driving within the miles limit and maintaining the car within excess and wear condition.
By taking over a lease you will benefit from some advantages, including the possibility to drive a short term lease with no upfront fees, no down payments, lower monthly payments and in some cases, even receive cash to drive away a lease. Assuming a lease can be a great alternative for those people that don’t want to buy a used car.
For those of you that don’t know the difference between leasing and buying a car, here are the most important ones that you need to be aware of. First of all, when you lease, the bank is the owner of the car and you will make rental payments every month. When you have reached the end of the contract lease, you will simply hand over the keys back to the owner. This is a great way of enjoying a different car every few years without having to worry about the depreciation that is implied by car ownership.
If a person that is on a lease cannot afford to make the monthly payments or if they got bored with the car, they don’t have the possibility to give the keys to the bank and end it. If this occurs, the bank will ask the person to write a check for the amount of money of the remaining payments. These lease transfers are the ideal way of getting out of a lease by simply transferring the vehicle to over someone else so you can get out without any further responsibilities attached (there is an exception to this which will talk about later on). There are many people that trade leases for a bundle of reasons, including: family move, job loss / job transfer, family growth and others as well.
If you are certain that you want to take over a lease, here is what you should do. First, have the seller of the lease get in contact with the lease firm. Have them inform the firm that he is interested in having the lease on his car assumed. You now need to agree with the person who is selling the lease to assume the loan at the current payment amount. After that, you must fill out and submit a credit application to the company that sold the lease. The lease company will send you a contract which you must fill out. After filling and signing it, you need to return it to the lease company.
After the lease seller gets in contact with the company that gave him the lease, you will assume the car lease. Now it would be the best time to get the car and take over the payments on the contract until the lease term will expire. After that, you need to return the car to the party from whom the vehicle was leased in the first place.
Don’t forget to check out the amount of miles permitted from the lease company against the actual mileage used prior to assuming a car lease. You need to make the necessary arrangements in order to make the lease seller pay the overage fees if he has driven the car more than it was written in the contract.
You need to be aware of the fact that some lease companies do not allow such transfers. Some of the financial institutions will prohibit the transfers in the first few months or the last few months of the contract. Others will allow these transfers but keep the first lessee responsible if the new lessee defaults. This is very convenient for the person that takes over a lease but very uncomfortable for the original lessee.
In the following, we will present a couple of questions that you should take into consideration when deciding to take over a lease from another person. These questions will help you during the negotiations.
a) How much time is left on the lease?
b) How many miles remain?
c) Are there any incentives or down payments involved?
d) Who is in charge of paying the lease transfer costs?
e) Are there any special requirements that you must fulfill, like a security deposit?
f) Who will pay the car’s inspections, license transfers and the rest of the involved fees?
g) Who will be responsible of doing the necessary paperwork?
Needless to say that if you decide to take over a lease you should inspect the vehicle and look for those hidden damages. In addition, it would be highly recommended to ask for a vehicle inspection report and if the dealer is unable to provide this to you, our advice is to take the vehicle identification number (VIN) and request a free car history report on the Internet.
The VIN code consists of 17 characters and you will find it either in the front dash or on the back taillight. Remember that this code does not contain the letter I, O or Q which means that if you encounter them or the VIN code consists of less than 17 characters, it means that is has been altered and you should avoid getting the car.
The process of assuming a car lease isn’t that hard as many of you might have thought. With patience and great attention to details, you could save a bundle of money by taking over a car lease, just remember to play close attention to all the details in the lease contract so that you won’t have any unfortunate problems in the future.
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