Lease Takeover Risks?
I assume the dealership is involved and any issues with the car would already be known...
Any way you can get screwed?
Aug 7th, 2013 2:41 pm
Aug 7th, 2013 2:47 pm
Aug 7th, 2013 2:48 pm
Aug 7th, 2013 3:01 pm
Aug 7th, 2013 3:03 pm
Is OP assuming the dealer is going to examine the car in detail prior to the transfer?
Aug 7th, 2013 3:30 pm
What do you mean by w&t?booblehead wrote: ↑Prior to your takeover, make sure the car has NOT been in an accident, big or small. If it was involved in an accident, was the repair done to the financing company's approved guideline ? If not, you are on the hook for non approved repairs.
At end of lease, any excessive w&t items are your responsibilities. It could amount to big $ ??? The luxury car brands tend to be more picky on these sort of things.
Does the dealership offer any service to do an inspection for any accidents/repairs - if not, is this something that should be done elsewhere?Busybuyer888 wrote: ↑Is OP assuming the dealer is going to examine the car in detail prior to the transfer?
I think the dealer will just process the lease transfer paperwork for their transfer fee.
If there is damage on the car, it is the responsibility of the person returning the car at the end of the lease to fix the damage. (ie. OP still needs to make sure car is in good condition when OP does the transfer.)
Hopefully, there the car is still under warrantee for balance of lease to cover major issues.
Aug 7th, 2013 4:01 pm
Aug 7th, 2013 4:06 pm
Aug 7th, 2013 8:22 pm
Aug 7th, 2013 8:27 pm
Aug 7th, 2013 9:47 pm
Aug 7th, 2013 9:48 pm
Pardon my ignorance... I would think that depreciation on a new vehicle is sort of logarithmic function of time, i.e. it is the steepest in the first 1-2 years, and then it slows down. In case of a lease, however, the cost of depreciation is spread more or less equally over the entire term. That's why shorter leases have higher monthly payments.
Aug 7th, 2013 10:20 pm
Shorter term, for one. But yeah usually if the lease wasn't a good deal in the first place (like the original lessee paid MSRP or something), it's not going to be a good one to takeover. A lot of people that lease don't put anything down either. So for getting someone to takeover a lease usually a cash incentive is offered by the current lessee. That and/or signing over the original security deposit. All these things equal something attractive to make someone take over the lease--shorter term, if there was a good deal originally, a downpayment made originally, cash incentive, security deposit sign over, paid transfer fees. Any one or combination of those can make the lease desirable for someone to take over.Siberian wrote: ↑Pardon my ignorance... I would think that depreciation on a new vehicle is sort of logarithmic function of time, i.e. it is the steepest in the first 1-2 years, and then it slows down. In case of a lease, however, the cost of depreciation is spread more or less equally over the entire term. That's why shorter leases have higher monthly payments.
In other words, the original lessee has used a new car for couple years when depreciation is the steepest, paying a 48-month lease rate on what effectively is a 24-month lease. Whoever takes over the remaining 24 months is left to hold the bag (absorb the depreciation that had occurred in the first 24 months). To offset that, there would have to be a really really good downpayment on the original lease. Otherwise, what is the point to take over someone else's lease?
Aug 7th, 2013 10:28 pm
Thanks for the link ES, there's a lot of good information that I would never have even thought of. I just know that when you turn the car back in at the lease end, any damage has to be covered financially.