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Lease Transfer - Lease Assumption |
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The term, lease
transfer, as it applies to car leasing, refers to the concept
of shifting responsibility from the original lessee to a second party
without actually ending the lease. This concept, made popular by Swapalease The lease transfer process can offer significant cost savings for people who need to get out of a lease early. There are some administrative costs involved but nothing close to the typical fees associated with early terminations. Unfortunately, it is typically not possible to simply break a lease and walk away clean. There are two parties in a transaction of this kind. There is the original lessee, the "seller", who transfers the lease to a "buyer" who assumes the lease. Depending on which party's viewpoint you take, the transaction is either a lease transfer or a lease assumption. We've already mentioned the benefits to the seller, but there can also be significant benefits to the buyer who assumes a lease. First, it's a great way to drive a late-model vehicle, inexpensively, for a short period of time (the number of months remaining on the original lease). Some people look at it as a way to "test drive" a vehicle they may be considering, or as an alternative to long-term renting. Second, assuming a lease offers a way to pick up a real bargain. Often the seller may be desperate to end his lease and may offer incentives (cash) to buyers. And, if the seller originally made a large down payment, received promotional rebates, and negotiated a good lease deal, the new buyer inherits all these additional benefits in the form of a low monthly payment. In short, many lease assumptions can be outstanding bargains, especially on luxury model vehicles with high residual values.
So how does one go about transferring a lease? First, you don't do without the lease company being involved. To do so would be a violation of the lease contract, not to mention the legal and financial risks. You can find a "buyer"
yourself or you can use a service such as Swapalease Be aware that some lease companies do not allow transfers. Other companies who allow transfers will require that the original lessee remain responsible for the obligations of the lease if the new lessee defaults. Therefore, it is advised that anyone considering a lease transfer contact their lease company or bank prior to taking any further action.
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