I’ve used Swapalease multiple times and think it’s great, but like anything it comes with some pros/cons. Some other pros that haven’t been listed here is the ability to get the exact amount of mileage you need. For example, I rarely drive my second car, but I need one, so was able to get one with 200 miles/month and my monthly payment was significantly less than what I could get a new lease for after taking into account the incentive the original leasee provided.
The risks/cons are significant - most importantly you have to trust the person you are “swapping” with and document EVERYTHING. Yes, you can inspect the car, but they will likely have the car for another 1-2 weeks as the paperwork is being processed, but at that time you are committed to taking the car. I suggest putting together a small contract outlining the agreement including any incentive paid, expected mileage when the car is turned over and taking pictures of the car at inspection. I usually include scanned copies of our licenses and the lease agreement. ALWAYS ask to see the original lease agreement before submitting the application and don’t take their word on anything including mileage overage $, buyout or even what is included in their monthly payment. Keep in mind you do have an “out” after the credit application is submitted as there will be paperwork distributed to you then would need to go to the leasee which would require a signature and notary. Once you sign the paperwork and it’s notarized, the car is for all intents and purposes, yours once the transfer is completed. The lease transfer process can take anywhere from a few days to a few weeks depending on how quickly you complete the paperwork. The finance company will notify you when the transfer is completed; suggest checking in daily once they have all the signatures so it doesn’t stay in the possession of the other person when you are technically responsible for it. When the vehicle is transferred, that is when the incentive should be paid, which also has an element of trust. Swapalease suggests using a escrow service if possible, but is rather pricey for what they do. Because of all this back and forth, I avoid doing a remote transfer even if an inspection company is involved.
Additionally, keep in mind transferring the lease is completely separate from the registration process. Every state is different, but typically the leasing company has to deliver the title DIRECTLY to your DMV in order for the vehicle to be registered since you don’t own the car. Since it’s already registered, there are no temp plates to be had. I had a major hiccup with US Bank where this took almost 2 months as the previous leasee changed states before it was transferred and the leasing company didn’t send the new title until after 50+ phones calls. Luckily, US Bank screwed up multiple times which I informed them about and had it documented via email, so they eventually reimbursed me for 2 lease payments via CFPB, but wouldn’t say that is typical. Keep in mind the lease is being paid one way or another so the leasing company has little incentive to expedite the registration/title process.
Taxes can have a huge implication on a lease transfer and can get complex because every state has different rules. Note that an in-state transfer is usually much easier for taxes and other aspects like titling/registration. For example, NYS tax is typically paid upfront, but they do NOT refund or allow you to apply the prorated amount to the tax to be collected from the new state if transferred out of state, so essentially you would be double taxed on that portion of the lease which could kill the deal. The title transfer and registration could be a few hundred bucks depending the state, while I once paid $6 for an in-state transfer for tags and registration.
I suggest you start the process 2 months in advance to when you need the car to ensure it gets processed in time and add take into account that cost when considering the benefits of assuming the lease. The process can get time consuming so don’t recommend taking really short leases (under 12 months) especially if out-of-state ones.
Dealing with the individual people on Swapalease is a mixed bag and some people have the right expectations, while others think you should pay what they paid, no matter how bad their lease is. There is a Q7 on there now for $1,600/month in NYC as the current leasee likely rolled a different lease into the agreement and she wasn’t understanding no one would ever pay that. I asked her for a $30K incentive to make it competitive and she almost had a heart attack. In the end, new car leases are fine for comparison, but ultimately you are getting a “used car” not a new car, so there needs to be significant incentive vs. walking in the dealership IMO. Yes, you are likely saving on acquisition and doc fees, but at the same time, closer to having to paying the disposition fee and responsible for the condition of the car including replacing tires if necessary. I also suggested monitoring Swapalease for a couple of weeks to see what cars are going for as they will switch to “pending” then “sold” before being removed from the site. Don’t fall in love with a car, figure out what you are willing to pay per month, ask for the incentive that would get you to that number, and be ready to walk if they are unwilling to accommodate.
Sometimes you just won’t be able to find the right car to fit your exact needs for the right price during a given time period so have a new car lease lined up as an alternative.
That was long winded, but just my experience. Hopefully this doesn’t scare you off as I’m going to potentially use Swapalease again right now, but just being upfront. Hit me up if you have specific questions about the process.
