I read that in general if you don’t qualify for lease approval on a new car, it’s easier to get approved for a lease takeover. I suppose the downside is you don’t get to drive the car that long unless you are prepared to buy the car at the end of the lease, and, you didn’t get to drive the car when it was brand new yet still pay the same lease amount?
It would seem to me anyone looking to get out of a lease and really dodge a huge bullet not having to pay the early termination penalty would be open to paying the new leasee to take over the lease!
Yea just to chime in, if you were rejected for a lease on a new car, don’t assume you can simply pick up a lease swap and the approval is lax, if anything it may be more stringent. Also keep in mind you will be evaluated by the loan holder based on your ability to pay the lease as is, not based on any kind of reduced monthly price from an owner offering an incentive.
Lender qualifications are the same whether you’re applying at the dealership or online through the credit portal. It’s called an ‘application’ because you’re applying and it’s reviewed and approved based on your credit worthiness.
If anything, it would be more difficult as they already have a qualified and obligated individual under contract. The risk of course is that person potentially defaults, hence consideration of exiting the lease but in terms of credit they would not be any more lax on their criteria just because it’s a transfer.
Additionally, if person A was approved as T1A, you’d also need to be approved as T1A as the contract is already written and the MF set based on your credit worthiness; T1A = buy rate/highest qualifications.
May the qualification is the same but sounds like the credit history’s effect is different on an assumed lease, per Bankrate monitor. Sounds like you could get better terms than you would normally. This infers then that the qualification criteria is indeed not the same as what it normally would be for those terms. It’s a bit confusing. But I think what you;re saying is, that if the lease was a certain tier, you have to qualify for that tier and they won’t qualify you and a lower tier because they can’t alter the terms of the lease. If that’s true then I’m perplexed why Bankrate included this statement as if there’s a benefit. It seems to infer you can qualify for a higher tier than your normally had.
“Hall says that you need to have good enough credit to qualify for the lease, but you won’t be subject to tiered pricing based on your credit history since you are taking over under the exact terms of the existing lease.”_
It’s my understanding that you can over qualify for an assumption but that the terms of the lease will not be changed.
So person A with T2 credit is given a lease with 7% APR, person B with T1A credit applies for assumption and is approved but still stuck with T2 APR.
Interest is determined by risk and risk is determined by credit history. That risk will follow the executed contract as granted by the lender to it’s original applicant from my understanding.
