For most, lease assumptions are a new thing. You might have been referred or clicked a hyperlink to discover LeaseTrade.com and you want to see what all the excitement is all about. One thing is for sure, lease assumptions are a fantastic new option for people that are looking for a great deal and tremendous flexibility in purchasing a used car.
Lease assumptions provide a low cost and flexible way to get into a late model car. Before we jump into the details, let's outline some of the key benefits of why you should consider assuming a vehicle lease.
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Benefits of Assuming a Car Lease:
- No upfront money or down payment needed
- Save thousands of dollars
- Short term lease with an option to purchase at the end
- Get paid to assume a lease
- Lower monthly payments
- Drive more car for less money
- Always a late model car
Let's delve into the details on each of these benefits to see how they make lease assumptions an interesting option.
No upfront money or down payment needed.
When the original person leased the car, they paid an initial down payment, a security deposit (if applicable), a bank lease acquisition fee, a luxury tax (if applicable), as well as title, license, and registration fees. Since many of these fees are only assessed when leasing a new car, the lease buyer is not subject to these costs as they have already been paid.
Save thousands of dollars.
When you assume a lease, you are simply taking over someone else's monthly car lease payments for the time remaining on the lease. Because the down payment was paid when the car was originally leased, the down payment has already been paid. Thus, it lowers your effective monthly payment. For example, if the original lease buyer paid a $2000 down payment to lower the monthly lease payments to $410 per month, when you assume the lease, you continue paying the reduced $410 per month until the end of the lease. By assuming a lease, you also assume the original down payment which lowers your monthly lease payment and saves you money.
Short term lease with an option to purchase at the end.
New leases come in various durations ranging from 12 to 72 months. With lease assumptions however, because the lease has already been started, you can find lease cars with shorter durations. This offers lease buyers the choice of assuming a shorter term lease that has already run its course and now has a shorter time to lease expiration. You also have the option to purchase the car at a "below market price" when the lease expires.
Get paid to assume a lease.
Many lease sellers offer a "seller cash incentive" to assume their vehicle's lease. What this means is that the lease seller will make a cash payment to the lease buyer upon successful completion of a lease assumption. How this works is the lease buyer and seller agree to a specific cash incentive amount prior to the lease being assumed. After the lease transfer has taken place, the seller pays the buyer the incentive amount directly.
Lower monthly payments.
There are two reasons why assuming a lease will lower your monthly payments. The first is that many lease sellers offer a "seller cash incentive". This cash incentive effectively lowers your monthly payment. For example, if the monthly lease payment is $400 per month with 12 months remaining and the seller offers a $600 dollar cash incentive, the effective lease payment is $400/mo. - ($600/12mo.) = $350/mo. The second reason is that many leases were originally created with a longer lease term (i.e. 48-72 months). This lowers the monthly lease payment as the payment was originally calculated using the longer lease term.
Drive more car for less money.
Leasing offer buyers the ability to pay for the use of a vehicle over a specified time period. For comparison sake, it is somewhat like renting a vehicle during the time you lease it (but leasing and renting are different). Because the monthly lease payments are calculated using the difference between the original purchase price (capitalized cost) and the end of lease value (residual value), the monthly lease payments are much less than if you financed the total purchase price of the vehicle.
Always a late model car.
Leases are mostly offered for new car purchases so lease assumption opportunities tend to be for the latest vehicle model years.
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