What are the disadvantages to taking over a lease

suv
nj

#1

I saw a few vehicles on the swap lease web site but I am worried there are hidden terms or disadvantages to taking over someone’s lease. Has anyone had experience?


#2

I would like to know as well.

Also, does the leasing company inspect the car or anything during the transfer?


#3

No, it’s completely up to you. The leasing company doesn’t care because someone is paying the lease one way or another.

Its your responsibility to inspect the car and have it brought to an professional if necessary. You likely want to pull the CarFax to be aware of any accidents and get an idea of the service completed. Any damage should be address before you take possession or you need to come to an agreement with the other person on what is fair.

Both transfers I completed did NOT include the all the details of the lease in the official paperwork, so get a copy of the signed lease ASAP before thinking about submitting an app. Don’t trust the person regarding length, miles allowed, if tax is included, deposition fee, etc.

Also be aware that the transfer will be completed THEN the title will be send to your local DMV (which you will need to request) so will likely be a period of time where you can’t drive the car until that is completed. In state transfer are certainly easier especially since registration fees are already paid and suggest staying away from short term leases (<12 month) because the registration process can be a hassle. Regarding out of state transfer, look into any tax implications from going state to state. For example, NY state requires taxes to be prepaid, but do not provide any refund or ability to transfer to a new state, so my impression is the lease would then be double taxes and raising your payment.

You can certainly get a good deal and completely legit, but solely up to you to do the research and manage the process.


#4

Great post by @Britten440, it’s really important to inspect any car you take. Other things to consider are general wear and tear and how much tread the tires have left. My buddy took over a lease and the owner ended up paying him for some of those issues.


#5

My pleasure. It’s is a rather odd transaction and much of it is built on trust, especially as the new leasee. For example the person keeps the car while the paperwork is being processed, although you have already committed legally to take it by signing the transfer paperwork. Also, if he is going to pay incentive it would be done at the time the vehicle is transferred but no one can compel him to pay (unless you use a Escrow company).

I wrote a longer post on this a few months ago, but definitely recommend putting in place a simple contract outlining all the details (incentives, known issues/damage, expected mileage on the car at the time of transfer, etc) and take pictures of the vehicle so you can compare at the time of transfer.

Because of all of this, I highly recommend only working with people you feel are trustworthy and forthright.


#6

Keep in mind after you assume a lease, you’re now on the hook for the disposition fee. Banks seem to be quietly increasing this since it’s not really a consideration at lease begin. MBUSA now charges $650. To turn in a vehicle. Unreal.

Paying this once every ~3 years is pallatable, I consider it a ‘lease tax.’ But if you’re flipping short term leases, definitely a consideration to be mindful of.


#7

If I’m not mistaken, SAL has a third party inspection service you can hire for a fee and they come to you. I’ve always gotten a dealer inspection done for a fee before assuming someone’s lease but it’s more hassle.

There’s a certain amount of risk involved for sure. If you have the ability to ask for service records, I’d do that as well.

One car I assumed had an aftermarket headlight kit on it, nobody realized until I found a box in the trunk with the original lights. So even if you get an inspection, realize they don’t find everything and people mess with their cars. Unless there is significant savings and you’re comfortable with it, think twice about doing it, especially if it’s out of state and you can’t see the car yourself.


#8

I’ve taking over three leases and find it better, in terms of saving on fees and drive offs, than leasing new. However, I found out looking at other lease swaps that some people do not take car of their cars. When I inspected a MBZ to consider taking over lease, I found scratches, dents and a lot of interior dirt (would of been pretty expensive after turn in).
One Mini I looked at, all of the wheel had real bad rim rash. Two rims were really bad.
Another issue I have seen is over miles. Some people get into leases thinking that 7-10K a year works for them. But living in SOCAL and driving normally miles burn fast.
Like mentioned above, inspection is key (inspect car, history and lease contract).
Four years ago I was interested in leasing a Lexus GS350 Fsport but did not want to pay any drive offs and the high monthlies. So I looked at swapping one. The first I inspected, I noticed the monthly was extremely low, I asked why and he said he only requested 10K miles a year, put down $4500 SD and has a relative that works at the dealership. Since there was barely a year left on the lease he only wanted his deposit and he was going to pay all transfer fees (plus first month payment). He also reported his relative, worked at the local Lexus dealership, would keep the low monthly on a newer GS after current expiration.
Since the car had only 6K miles left on the lease and could NOT guarantee same price on next Lexus I declined. But the $4500 SD never concerned me since I’ve paid them before and was never burned after lease turn in.


#9

IMO, aside from a detailed inspection, the biggest thing to look at in lease swaps is cost per mile. Simply divide the monthly payment by miles per month left. This to me is a much better indication of ‘value’ than monthly payment and allows you to quickly determine if it is a better or worse value than leasing a comparable new vehicle.

Like this Edge is a terrible monthly at $551, but the remaining miles actually make it a pretty good deal (IF you can actually use them) - only $0.236 per mile!

Assuming he put absolutely nothing down (not likely), the lessee has paid a whopping $1.157 per mile. Yikes.


#10

I don’t think that’s a completely logical approach to just divide the lease cost by mileage available, as you could always add miles at the given rate (typically .15-.25/mile) and how you should approach your negotiations. Even if a car has zero available miles, it still has a monthly value since you can add miles at the given rate.

That Ford example is actually not very good because the extra 1,300 miles/month is only worth around $195/month (vs. 12K/year lease) so you would be leasing a used Edge for $350/month.


#11

AFAIK, you cannot buy miles in the middle of a Ford lease and overage charge is $0.25/mi. 1,300 extra miles at $0.25/mile is $325. So an equivalent vehicle with 1000 miles/month remaining would have to be $226.36/mo for an equivalent value. An Edge at $226.36/mo would be transferred within a day.

If a lease has zero remaining miles, the payment is a fixed cost with the mileage overage being an additional variable cost - I do not see any positive value there. If that Edge were free, it would still cost $583.25 to drive it 2,333 miles each month. It is impossible to swap a lease that has hit it’s mileage limit, because the mileage charges are much more expensive than the initially contracted mileage depreciation.

(this is not applicable to someone who can’t use the miles)


#12

No way mileage overage for an Edge is .25. 15 or 20 cents (my 50k Explorer is .20/mile)

Your approach doesn’t take into account the actual value of the car rather just what is the cheapest per
mile to drive. So this is a better deal than an X5 for $650/month with 2k miles/month available?

Also it assumes everyone needs 2,300/miles as you stated. My point is this method is not a legitimate way to compare leases on Swapalease and determine a value based on mileage remaining.


#13

MSRP on the car doesn’t have anything to do with mileage cost. Whether you get an Expedition or a Focus, you’d pay the same mileage overrage rate.


#14

You’re arguing against a very banal point by creating straw man arguments and making false equivalencies. I simply posted a link to a deal that looks bad on the surface, but is actually not bad at all because of the amount of miles remaining on it if they are needed which I said twice even though it’s quite obvious (so I don’t know why you said it a third time as if I misrepresented it).

Most people use their vehicle to transport themselves or others. This transportation is quantified in miles. Therefore, it seems logical to calculate the cost of this transportation ($/mile). I don’t understand how this is controversial.


#15

Because you suggested a flawed method to evaluate the value of a lease transfers?

“Simply divide the monthly payment by miles per month left. This to me is a much better indication of ‘value’ than monthly payment and allows you to quickly determine if it is a better or worse value than leasing a comparable new vehicle.”

What is the cost per mile for a comparable new Edge lease?

It’s also why said a car with 0 available miles still has a monthly value.

Most people here don’t see cars as solely as a means of transportation so the goal is never to find the car with the lowest per mile cost.

I agree with you that Swapalease is a good place for people who need little or a lot miles but no idea if that Edge is a good deal or not without some method to compare it.


#16

Disadvantages from experience would be not finding the options I wanted, other cons would be you don’t like the color. As far as financials go you have to be careful with out of state transfers due to differences in tax, you also may have to pay a transfer tax depending on state and your monthly may change going up or down if there’sa monthly lease tax rate, swapalease is littered with bad deals and often times you can find a better deal with the color and options of your choosing by going straight to the dealer, also no worry of what the dealer did to the car because it’s brand new, not to discourage you or anything, you can find steals on swapalease as well that you could never find through a dealerships, just be careful and do your homework before and take a detailed look at the car before that credit app goes through if you can.


#17

I’m not sure what you’re arguing for. Do the math yourself.


#18

I would have to disagree at a certain level, an f150 platinum mileage over is 25 cents regardless of it being 10k miles or 19.5k miles, an xlt has a mileage overage of 20 cents, similarly my charger hellcat which is an srt product has 50 cents a mile overage, a regular dodge charger has an overage of 25 cents a mile, msrp is not necessarily as important as the trim/product but higher trims equals higher msrp thus giving you a higher mileage overage rate in certain situations.


#19

This is captive specific. All GM has a .25 overage for any make/model. Nissan and Infiniti are the same. Likewise with BMW/Merc. I assume Ford and Chrysler Cap are anomalies in this regard.


#20

that’s true as well, more research must be done, so far fca and ford/lincoln have different rates, probably other anomalies out there as well.