Car Lease Takeover: What to Consider

Car Lease Takeover What to Consider

When most people shop for a car, they think about the three most popular options: buying new, leasing new, or buying used.

However, there is another, lesser-known type of vehicle acquisition that may be best for you. Known as a car lease takeover, you can drive a nearly new vehicle by simply taking over another driver's lease.

Here’s a look at what a car lease takeover is and whether or not it is the right choice for you.

What Is a Lease Takeover?

What is Lease TakeoverA car lease takeover, otherwise known as a lease assignment or lease transfer, is where you take over another driver’s lease until the end of the lease term. Sometimes, people will want someone to take over their lease because they can no longer afford the payments, or they want to drive something new before the lease is up.

As the person who takes over the lease, you are responsible for the payments until the end of the lease contract. A car lease takeover is an attractive option for some people looking to try out a new vehicle without committing to a full lease.

Leasing Terms to Know

Whether you are ending a lease or taking over a lease, there are some leasing terms that you should be familiar with. Here’s a look at some of the most common leasing terms that you should know about:

  • Capitalized Cost - This is the negotiated selling price of the vehicle plus any fees that are added on top of the selling price. This is also known as the “Cap cost”.
  • Capitalized Cost Reduction - This is all the upfront payments and credits that lowers the cap cost. This includes the down payment, trade-in allowances and rebates.
  • Adjusted Capitalized Cost - This adjusted capitalized cost is the capitalized cost minus the capitalized cost reduction. This is number that the leasing company uses to determine the monthly payments.
  • Acquisition Fee - This is the fee charged by the dealer or the leasing company to arrange the lease.
  • Depreciation - This is how much value a vehicle loses over time.
  • Residual Value - This is how much a vehicle is worth at the end of a lease. Learn more about residual value here. 
  • Money Factor - The money factor refers to the interest charged during a lease. Convert the money factor to APR here. 
  • Term - This refers to the length of the lease. Terms for a lease can range from 24 to 72 months.
  • Lessee - This is the person leasing the vehicle.
  • Lessor - This is the dealer or the company that is leasing the vehicle.
  • Gap Insurance - This is a type of insurance that a lessee will get to cover the cost of a vehicle if it is totaled or stolen.
  • Security Deposit - This is money held by the lessor to cover any damage to the vehicle. Learn more about car deposits here.
  • Disposition Charge - This is what a lessee will charge to cover the cost of cleaning a vehicle at the end of a lease. Learn more about each manufacturer's disposition fee here. 

What Happens in a Lease Takeover?

What Happens in Lease TakeoverHere’s a look at what happens during a lease takeover from both the perspective of someone ending a lease and someone taking over a lease.

If You Are Ending a Lease...

If you are ending a lease, you can use a service to find someone willing to take over your lease. You will then pay a lease transfer fee. The company that facilitates the lease takeover will handle the paperwork with the leasing company.

If You Are Taking Over a Lease...

If you are taking over a lease, you will want to find a vehicle through a lease transfer company. From there, you will pay the appropriate fees and take possession of the vehicle. The lease transfer company will handle the paperwork with the leasing company.

Why Should I Take Over a Lease?

There are a number of great reasons to take over a lease. First, you don’t have to deal with making a big down payment. Second, you don’t have to commit to the full term of the lease. Finally, a lease takeover is an ideal choice if you would like to drive a vehicle for less than 24 months without owning it.

How to Get a Good Deal on a Lease Takeover

How to Get a Good DealMake sure that you get a good deal on a lease takeover. Here are a couple of tips to consider:

  • Get a Vehicle With Little Damage: You will be responsible for any damage that the previous driver had on the vehicle. Therefore, make sure you don’t take over the lease on a vehicle with lots of wear and tear.
  • Be Sure to Check Mileage: Also be sure to check the mileage since you will be bound to the mileage allowance on the original lease.
  • Take Over Lease With the Amount of Time You Want to Drive the Vehicle: Make sure you take over a lease with the amount of time left that you want to drive the vehicle.

Lease Takeover: Pros

Lease Takeover ProsYou Can Try Out a Vehicle Without Committing to a Full Lease

When you take over a lease, you don’t have to commit to driving it for the full term of the lease. This is ideal if you want to try out a vehicle before driving it for a longer-term.

No Down Payment Necessary

You don’t have to lay out a big down payment on the vehicle.

Lease Payments Are Often Lower Than Loan Payments

Lease payments tend to be lower than vehicle loan payments. This allows you to drive more vehicle for your money.

Lease Takeover: Cons

Lease Takeover ConsThere May Be Limited Miles Left on the Lease

You are bound to the mileage allowance on the vehicle. Therefore if you take over a vehicle with lots of miles on it, then you will be responsible for any fees associated with excess miles driven.

You Are Responsible for the State of the Vehicle When You Receive It

You are responsible for any wear and tear that the previous driver put on the vehicle.

There Are Fees Associated With a Lease Takeover

While you won’t have to deal with a down payment, you will have to pay certain fees to take over the lease.

Where Can I Takeover a Lease?

Looking to take over a lease? Here’s a look at the best lease takeover sites available.

Is a Lease Takeover Right for Me?

A lease takeover may be right for you if you don’t want to deal with a down payment and you want to drive a vehicle for less than 24 months. Also, consider a lease buyout for certain scenarios.

Frequently Asked Questions

Are lease takeovers worth it?

A lease takeover is worth it if you choose a vehicle with the right amount of miles and not much wear and tear. Also, if you intend to drive the vehicle for less than 24 months, then a lease takeover may be your best option.

Can you take over someone’s lease?

Yes. You can take over someone’s lease. However, you are responsible for the vehicle's condition when you receive it and are bound by the terms of the lease.

What is the best lease takeover site?

Swapalease is the most popular lease takeover site due to its large selection and high customer feedback rating.

Do I need a good credit score for a lease takeover?

The minimum FICO score for a lease takeover is 620. However, you may want to have a FICO score of at least 700 to ensure that you will be able to take over the lease on most vehicles.

Can I return a leased car early?

You can return a leased car early. However, you will have to pay an early termination fee.

Why would I take over a lease?

Taking over a lease allows you to avoid making a down payment on a vehicle. Also, you have the opportunity to drive the vehicle for less than the full term of the lease.