Pros and Cons of a Lease Takeover
What if you want to drive a new car but don’t feel like committing to a full lease? A lease takeover might be a good option because you can save some money and get a great deal. On the other hand, taking over a lease without due consideration can cost you more. Learn about its benefits and risks in this article.
What is a Lease Takeover?
A lease takeover is simply a transfer of a lease from one holder to another. If someone wants to stop a lease, they usually have to pay an early termination fee, which adds up to the amount similar to the costs one would end up paying at the end of a lease term. This is why early termination isn’t the best option to save money. Alternatively, they can have someone else take over their lease.
Pros of a Lease Takeover
With a lease takeover, you mainly benefit from getting a lease someone else has started:
- No downpayment: Someone else had to pay the down payment. You are just taking over it mid-way.
- Shorter term: With a remainder of a full lease term, you are less likely to later change your mind and start thinking of early termination, thus avoiding all the hustles of selling your lease or paying an early termination fee.
Cons of a Lease Takeover
In addition to the benefits, you also inherit all the (financial) responsibilities from the previous leaseholder:
- Mileage restrictions: A typical lease agreement indicates an annual mileage limit, which, if exceeded, incurs extra fees. So make sure the previous leaseholder leaves you with enough mileage allotment.
- Wear and Tear: You will be the one who hands the car back to the lease provider, so ensure to check the vehicle’s condition against the contract guidelines on what is considered excessive wear and tear.
- Hidden Fees: This is just to remind you to be cautious of any hidden fees in the contract.
Tips on Lease Takeover
Here’s what we recommend if you decide on taking over a lease:
- Carefully examine the lease agreement and learn what fees and charges you may potentially be dealing with later.
- Obtain a car history report on Carfax to be aware of any accidents the car has been in during the lease period.
- Inspect the vehicle with a trusted mechanic. This will give you an idea of possible future repairs should you decide to keep the car at the end of the lease.
If you feel that all of that is too much to deal with, just tell us what vehicle you need. Our specialist will help you find a great deal with choosing the right car and getting approved for a loan if necessary!