A lease takeover is when you assume, or take on someone else’s lease payments. The current lessee terminates their lease early, and it would then transfer to you for the remainder of the lease term. If you know someone that wants to end their lease early, it could be a great opportunity for you to build credit and enjoy a new car for a little while. There are plenty of online resources for lease assumption to check out as well.
Why Choose a Lease Takeover?
There are two reasons people typically choose to assume someone else’s lease.
- They don’t meet the credit qualifications of a regular lease.
Leasing usually requires credit scores over 670. This often leaves many people, including teens in the process of building credit, unable to lease. Lease takeovers are often much easier to qualify for and can be a great option to start establishing credit.
- Lease takeovers can provide a convenient and comfortable option.
They almost always have a much shorter term than most normal leases or loans.
Pros and Cons of Lease Takeovers
Whether or not you should lease a car ultimately depends on individual preference. Your driving habits, personal “must haves” in a vehicle, and how well you keep up with car maintenance are all factors.
Advantages of Choosing a Lease Takeover
One of the main advantages of a lease takeover is a short loan term. Many people like the idea of a lease takeover because their not tied into a lease for up to 39 months. According to Scot Hall, executive vice president of Swapalease.com, the average lease takeover is 18 to 22 months.
Other general leasing benefits still can apply as well such as lower monthly payments, zero down lease options, and leasing service coverage.
Downsides to Lease Takeovers
Many these same things could also be seen as negatives, depending on what you want. Short lease terms dont work for everyone. If having to go through the process of getting a new car every couple years isn’t something you want, you could consider applying for an auto loan.
The potential drawbacks of normal leases still apply here as well. Mileage restrictions and over mileage fees are some of the biggest ones. If you drive a lot, leasing may not be for you. Those lower payments disappear real quick if you’re over on miles. Typically you’ll pay around 25 cents or more per mile you drive over your allowance. And trust us, they add up quick! You’ll also have to be sure to keep the car in great shape while in your possession, or you could face some hefty fines.