Lease 101

The Benefits of Assuming a Lease

As the existing holder of a lease (let’s call this person a “Seller”), they are already bound to a leasing contract for the duration of their remaining term. In order to exit that lease early, they would have to pay thousands of dollars in early termination penalties to their leasing company.

The leasing company is under very little incentive to allow the Seller to return your vehicle to them. They lose thousands of dollars instantly when a vehicle is turned back in early.

The alternative is to find someone else who would like to assume a lease, allowing the Seller to walk away without paying these stiff penalties. In some cases they may offer a cash incentive to a Buyer to make their deal more attractive than a new lease or competing deals.

It’s important to remember that when signing a lease you have a contractual obligation to the leasing company for the entire term of the lease. It’s not a month-to-month rental, so your obligation is not just the monthly payment, but the entire amount of the lease, which usually totals tens of thousands of dollars.

Back to Assuming a lease