Lease transfer w/ MSDs

the wife’s current Highlander XSE is still early into the term, however very low mileage and with a pretty low monthly, and after some recent upsides - we’re in position to move into a more high-end luxury SUV.

So I know with lease transfers, MSDs initially paid by the original leaseholder are passed to the newly transferred lease holder. However, can some sort of legal document be executed to where at lease-end or sale, etc. of the vehicle, the original lease holder can be reimbursed the MSD payments if the new lease holder is an agreement of such a subset agreement at the point of transfer?

only setback I can think of is the transferred lease holder refusing to return the MSDs, a civil suit can then brought forth and be more costly in the long run - but that’s the risk in getting out of the current lease and not losing the initial chunk of cash we put out


The way this is usually handled is the person transferring into the lease pays the amount of msds to the person exiting the lease at the time of transfer. At the end of the lease, they then get the msds payout instead of the original lessor.

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agree in that would be an ideal scenario. but I would think it is on the rarer side to find someone who will cough over cash on a transfer outside of processing fees. the majority of folks don’t know what an MSD is, 2/3rd the dealer staff doesnt seem to on the whole, and to promote this upfront cash requirement would seem to be a deterrent - hence why i’m thinking a subset agreement once traction occurs would be more beneficial, if it is even acceptable.

many shop based on the low monthly and then incentives to get the vehicle moved on, likely knowing they can probably squeeze more out of original leaseholder as time lapses. at least this is my transfer shopping experience that I’ve been through as a buyer

I agree you’d need to find someone that understands msds, but you’d need to for your suggestion as well.

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yeah, i’m guessing my angle is to get the inquiries with as little deterrent on face value as possible, and if they are then not interested after explaining the MSD and the subset agreement process i’m after, so be it.

i’m sure even if they are not interested, a leverage or last pitch can then be a lease-end incentive of splitting the MSDs. i have no statistics on lease transfers, but the whole thought is mainly derived from someone eager to rid their deal even if at a loss to them now and not face an entire full term burden/loss/repo - the new leaseholder knows they’ve already got the upper hand by even shopping this method…in the end, trying to make it as enticing as possible to transfer

I’m guessing that a potential buyer that is not familiar with MSD’s is not going to sign anything saying that they will owe the seller thousands of dollars at lease end.

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yes - very true. my only reliance/support would be Toyota validating the process of the MSD in hopes it resonates and it being why the monthly is this low, the overall want really

Why on earth would you wait til the end of the lease?

Any monies going in either direction need to be paid at the time the vehicle is handed over at the latest.

my premise is that most transfer buyers are reluctant to put out cash - and I fully get that.

at the end of the lease really makes more sense as there is no sense of loss by the transfer buyer if they’ve completed the term and/or sold the vehicle - you remove any doubt or thought of a scheme if and when they turn in the car and wash their hands of the lease

No one will pay you jack at the end.

if there’s a legal document to it that can be upheld, I’d differ

If you want to waste your time, money and aggravation trying to enforce it, go right ahead.

Vs waiting for the right buyer now with cash for MSD = no net expense since you can continue to use the car and very little time invested.

I was in the same shoes and I know what I did.

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Think about what you’re saying here - in order to attract someone that doesn’t understand MSDs, you want to essentially loan them the value of your MSDs for however many months years that remain on the lease with the promise of a return of said MSDs, with only the threat of small claims court to hold them to it.


obviously i would rather someone pay upfront on the MSDs, however those are few and far between, and with closer to 3yrs remaining on the terms and wanting to upgrade sooner rather than later, i dont see how presenting the option isn’t plausible? in all honesty, it likely comes down to giving up the MSDs by simply trasnferring and moving on to my next vehicle, or if someone is found to agree to such a notion, and they run with my MSDs…i lose out on it anyway. whether it goes the full extent for court, etc is an at the time decision

legal documents are only worth what enforcement mechanisms they come with. And these often come with a legal cost to that enforcement. And even a judgment is only worth what you can extract from the other party. Can’t squeeze blood from a stone.

I think the pool of candidates that would want to go with this plan is smaller than the pool of candidates that would pay the msds upfront.

Another thought, why not just find out your payoff, get quotes from Carvana/shift/Carmax/vroom and just see what you may need to pay to dispose the car with no liability. Heck you might even have equity, only one way to find out.

Only bringing in another angle on this…that’s great that financially you can afford a higher end suv and ideally you’ve done the due diligence on which one your after. I only mention this b/c we see day after day on here people get frustrated b/c the deals aren’t what they were 6 or 12 months ago. Mentioning this to make sure the value proposition is still their for whatever suv you are thinking of.

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none taken.

and agree - again, its looking to be a loss-loss regardless on the MSDs, as I’m wanting to be in a new SUV 2-3months tops

also went the carvana/vroom route already - i’m too new on my lease, 30 months remaining, for it to be worth it. the hit would eat away any return of MSDs, and then some

Frankly, just went through a transfer whereby I needed to get $6k back from new lessor. Yes, it did take awhile (4-6 weeks) and there were tire kickers that wasted time. But at that point, anyone that could fork over that amount of cash knew what MSD’s are and knew what they were getting into. In fact, if your deal is good, it’ll sell itself. I had three solid transferees lined up that would/could pay in full.

It also helped that BMW could verify the terms of the lease, MSD amount, and noted it on the new lease agreement.

Sure it took longer, but once the transaction was done, it’s done. No loose ends.