A How-To Guide For Taking Over A Car Lease [Step-By-Step]

Understanding Car Lease Transfer

A car lease transfer, or lease swap, is when you sell your monthly lease payments to another person.

In a lease swap, the buyer takes on all responsibilities to the leasing company. This means the new lessee continues the agreement with the leasing company.

People opt for the lease swap due to various reasons. They may have experienced financial changes or lifestyle shifts. Many do it to avoid dealing with a car that’s depreciated.

Car lease transfers are beneficial to both sellers and buyers.

The seller can get out of the lease contract without paying the penalties of ending a lease early. Swapping a car lease is a way to drive a new car for a lower monthly payment.

Meanwhile, the buyer enjoys the cost reduction the lease buyout offers!

Eligibility for Lease Transfer

How do you know if you’re eligible for transferring your auto loans?

First, you should check your leasing contract or call the lease firm. The leasing company will tell you if they accept transfers.

Next, ask if they have a lease transfer fee or other criteria. Some firms require the original lessee to have at least 12 months remaining on the contract. Meanwhile, others ban out-of-state transfers.

You’ll know the exact procedure for selling a lease once you talk to your leasing firm.

As with all leases, you must be up-to-date with your monthly payments. Otherwise, you may not get approval for the transfer.

In some cases, the leasing company will conduct a credit check. The buyer should have the same or higher credit score than the previous leaseholder.

Once you get all your documentation ready, you may begin searching for a suitable transferee!

Finding a Suitable Transferee

There are a few ways to find a suitable transferee to take care of your lease. Websites such as LeaseTrader and Swapalease are two of the best online platforms for lease swaps.

To use them, you must create an account on these websites. You then post your car details and other information. This can include mileage restrictions, transfer fees, and monthly payments.

Note that using such websites means you pay a small fee once the leasing contract is set. As the original lessee, you can negotiate with the buyer and agree on who will pay the fees.

Other places to find potential lessees are from your networks. You can post on social media or Facebook Marketplace to see if anyone might be interested in a short-term lease.

Tips for Finding a Suitable Transferee

Finding a transferee should be easy if you give a good deal and you’re honest with your post.

Remember to be upfront about the current state of your car. Mention any excessive wear on your post to avoid problems further down the line!

You may also attract buyers to agree to the lease exchange by providing a cash incentive. This incentive can be anywhere from $500 to $1,000.

Financial Considerations and Costs

An early termination of a car lease can be costly. To determine how much you have to pay, you may subtract your car’s value from the remaining balance on the lease.

In general, the earlier you end your lease, the greater the charge will be. Depending on your contract, the amount can reach thousands of dollars!

Selling a lease term is one of the solutions to saving you money. However, there are still some costs to consider before you push through.

Lease Swap Fees to Expect

Below, we list the expenses associated with a lease exchange.

• Transfer Fees: Transfer fees may cost around $300 depending on the leasing firm.
• Credit Application Fees: Leasing companies may ask you to pay credit application fees. This is so they can check your buyer’s credit rating.
• Inspection Costs: Be ready when your current lessee asks to have a professional inspect the car. A used car inspection may cost between $100 to $150.
• Potential Penalties: You must pay for damages before proceeding with the swap.
• Website Fees: If you find your buyer through a leasing website, you may have to pay middlemen fees. This can be anywhere from $100 to $350.
• Shipping Costs: When the buyer is too far from your location, you may have to ship the car out. Depending on the vehicle type, this may be $550 to $2,450.
• Taxes: Taxes differ from state to state. It’s best to inquire with the local authorities.

We know these fees may seem like a lot. Yet, if you do proper research, you may even earn a profit from your buyout price!

Leasing Company’s Role and Approval Process

When you initiate a lease takeover, part of your lease obligations is to get approval from the leasing company. This approval process takes at least two weeks to accomplish.

Below is the lease transfer process in most leasing firms.

• Lease Application: The original leaseholder presents a credit application to the leasing firm. In this step, you submit the necessary documents required by the leasing company.
• Credit Check: The company checks the new leaseholder’s credit cards. This credit report will determine if you’ll get approved for the transfer.
• Document Signing: Once approved, the leasing company sends both parties documents for signing.
• Keys Turnover: The current lessee turns the leased vehicle and keys over to the buyer. You then send the transfer documents to the leasing firm.
• Confirmation: The leasing company confirms the transfer. After a week, it’ll send statements for monthly payments to the new lessee.

Documents to Submit

Documents to get approval for an auto lease transfer may include the car title, bill of sale, and odometer statement. You’ll need to complete a car title transfer form at the local DMV.

In most cases, you must pay a sales tax or other residual taxes before transferring the title.

For the bill of sale, you should indicate the car’s make, model, sale date, and buyout price. Don’t forget to include the buyer’s personal information and signatures as well.

Legal and Contractual Obligations

A car lease agreement is a contract between you and the leasing firm. Because of this, lease takeover deals come with their contractual obligations.

As the original leaseholder, you must pay off all balances you owe the lease firm before the transfer. This can include extra miles and excess wear. If you fail to do so, it’ll hurt your credit score, and the firm can take legal action!

Once your original lease vehicle gets transferred to the buyer, your obligations to monthly payments end. All the liability you have over the car will transfer to the person taking on the agreement.

Be aware that some leasing companies will ask you to be a co-signer on car insurance. You should only agree to this if you know the buyer, as the firm can go after you if the new lessee stops paying.

For the new lessee, you’ll need to buy state-mandated auto insurance. You may also need personal liability coverage and collision insurance.

Vehicle Inspection and Condition

Now that you know the process and requirements of taking over a car lease, it’s time to discuss vehicle inspection.

Before you initiate the transfer, your car must be in its best condition. It should have no signs of wear and tear to avoid issues with the new lessee.

To ensure the car meets return standards, send it in for maintenance. Address the broken parts and fix all damages.

Aside from this, you may hire a professional to inspect the car. The inspector’s report will protect you should you encounter issues with the buyer.

Running a Carfax or AutoCheck may be a good idea. These companies will give you a vehicle history report and identify hidden problems with your car.

Once your car is free from damage, take photos of the vehicle. This serves as proof that you returned it in good condition.

Transferring Insurance and Registration

Transferring your car insurance is a necessary step in a car lease takeover. The insurance company may give you up to 30 days to complete the paperwork. Still, you have to do it before you hand the car over.

To transfer insurance, you should inform the insurance provider about the lease swap in writing. Give them the new owner’s details, and let the new leaseholder sign the documents.

The insurance provider may ask for IDs or other supporting documents. After this, they should send you a confirmation letter of the coverage. Note the insurance company may charge a small fee for the lease swap.

As for transferring your registration, visit your local DMV’s website to get a list of documents to submit. You have to submit these documents and sign the paperwork in person.

In some cases, you may have to go through a car inspection. Once you accomplish all the requirements, you can swap the license plates!

Potential Pitfalls and How to Avoid Them

What are the common pitfalls associated with car lease takeovers?

One pitfall is failing to negotiate. Remember that you’re dealing with people, so there’s always room for negotiation. Make sure to talk to the new lessee, and work out who will pay for certain fees.

Next, you should transfer all requirements as soon as possible. Pay the sales tax and file the car transfer title within 30 days. If you fail to meet the registration deadlines, you could get a penalty!

Always check the vehicle details, including the miles per month, months remaining, and the downpayment. Learn how to calculate the right buyout price, and ensure the monthly payments are updated.

Finally, consider the meet-up location. You should pick leaseholders that are near your area to avoid costly shipping!

Alternatives to Lease Transfer

Are there other ways to get out of your lease? The good news is, yes, there are! Below are some alternatives to a lease transfer.

• Lease Buyouts: This alternative is for those who fell in love with the car. You can buy the car before the lease ends for a few thousand dollars.
• Trading the Car: Trading the car means you exchange the vehicle for another model. For this option, any termination fees will roll into your monthly payments.
• Selling the Vehicle: If the leasing firm doesn’t allow lease transfers, you can sell the car instead. You should check your contract to learn how to proceed with this alternative.
• Subleasing: Subleasing is when you rent your car out to someone else. Here, you remain responsible for paying the leasing firm.

Frequently Asked Questions

Here are common questions regarding taking over a car lease.

Conclusion: Moving Forward with Your Lease Transfer

Taking over a car lease is a great way to avoid the costly expenses of buying a car. However, there are steps you need to consider before moving forward with the lease transfer.

You must make sure that you’re getting a fair deal, and transfer registrations as soon as possible. Always negotiate offers and hire experts to help you process the paperwork without issues.

Don’t forget to research and make informed decisions. If you approach the process with diligence, you can make a profit out of a car lease transfer!