Lease Assumption

There are times when a person or other private party may wish to get out of his or her new car lease. Common reasons a person may want to terminate a lease early include:

  • Relocation to a different state or country.
  • No longer being able to afford payments.
  • Opting for a different vehicle.

To avoid incurring early lease termination penalties, the private party might try to find someone else to take over the lease payments. This is commonly referred to as a lease assumption and is also known as a lease takeover.

The Benefits of a Lease Assumption

Just because someone wants to get out of a lease early doesn't mean it's a bad deal for you. In fact, the opposite is often true.

Some of the benefits of lease assumptions include:

  • Easier qualification.
    • If you don't have a good credit score, qualifying for a car lease can be difficult. Lease assumption is one way to get into a car lease without a great credit score.
  • Shorter terms.
    • Because part of the lease has already been paid off, you won't have to pay the lease for as many years as you might have had to otherwise.
  • Less fees due up front.
    • There are fees due at lease signing that you may not have to pay with a lease assumption, such as:
      • A down payment.
      • A security deposit.
      • Drive-out charges.
      • Official fees required by the city, county, or state.
  • The option to buy the vehicle at the end of the lease.
    • Since someone else has already paid a portion of vehicle's cost, you could get a good deal on the buyout price when the lease is over.

Keep in mind that when you assume a lease, you will be assuming responsibility for:

  • Existing damage to the vehicle.
  • Excessive wear and tear.
  • Mileage limitations.

Steps to Lease Assumption

If you're looking to assume a car lease or takeover a lease, follow these steps to make the process as simple as possible.

And please remember—your specific experience may differ from what is outlined here. Take these steps as a general guide to get you into the lease assumption that works best for your needs.

Step 1: Make a List

Before you search for a lease to assume, you'll need to make a list of a few vehicles you're interested in and that you'll be able to afford. It's a good idea to have several options just in case your first few choices aren't available.

Step 2: Research Lease Assumption Companies

To make the transaction possible, you'll need to find a company to handle all the details and paperwork. There are plenty of lease assumption companies on the Internet that can help you with the process. They'll also provide a list of vehicles for you to choose from so you can make your selection.

One or two companies to get you started are:

Step 3: Find a Match

The lease assumption company you choose will have a database of vehicles for you to choose from. Use your own list of vehicles that you made in Step 1 to find a good match. If you don't find the car you're looking for, you may want to try a different company.

As you look for a suitable vehicle, keep these details in mind:

  • The terms of the lease.
    • Including the length of the contract and the amount of the monthly payments.
  • Discounts or rebates that may be available to lower costs.
  • The condition of the vehicle, including:
    • Mileage.
    • Existing wear and tear.
    • Proof of scheduled maintenance.

Step 4: Make Contact

Once you think you've found a car to your liking, make contact with the lease assumption company or the original leaser for additional details. Keep in mind that just because you want the car and it looks good online, it may or not be a good fit depending on the terms of the original contract.

Step 5: Fill Out the Application

If all the details still seem like a good match, you'll need to fill out the online application available on the lease assumption company's website. Information you may need to provide includes:

  • A Social Security number.
  • Proof of monthly income.
  • Credit history.
  • A list of your major expenses.

Step 6: Complete the Transaction

If your application is approved, you'll need to complete the assumption or takeover by signing any additional required documents. You may also need to negotiate the terms of the deal, which typically includes a lease transfer fee. This can be paid by:

  • You.
  • The seller.
  • Both of you splitting the cost.

Once the vehicle is transferred into your name, you will assume the responsibilities of the lease contract. This may include:

  • Making all future scheduled payments.
  • Adhering to mileage restrictions.
  • Keeping up to date with scheduled maintenance.
  • Returning the car at the end of the lease contract.

If you're interested in buying a vehicle that has been previously leased, please refer to our guide to Buying a Previously Leased Vehicle. For more information about leasing in general, be sure to check out our Leasing 101 Guide.

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