Considering taking over car lease payments in Canada? Exploring this option can be a smart move if you're looking for a short-term car solution. Online platforms connect individuals wanting to end their leases with those seeking temporary car arrangements. However, before diving in, it's essential to be aware of potential fees and drawbacks associated with lease takeovers.
Advantages of Assuming a Car Lease in Canada:
1. Vehicle Availability: Leases typically span two or three years, making it challenging to find a good deal on a newer model outside the current year. Lease assumptions offer the chance to drive a relatively new car without committing to a more extended lease.
2. Short-Term Commitment: Unlike traditional leases that often last two to three years, lease assumptions provide a shorter commitment period. This flexibility allows you to test drive a vehicle without locking into a more extended contract, a rare find in traditional leasing avenues.
3. Cash Incentives: Many individuals seeking lease transfers are motivated to offload their vehicles quickly. Some may offer cash incentives or cover transfer fees, potentially saving you hundreds of dollars. Negotiating with the original lessee can secure a more favorable deal.
4. Lower Monthly Payments: If the original lessee had excellent credit and a substantial down payment, their monthly payments might be lower. Assuming the lease means adopting these favorable terms, resulting in potential cost savings.
Disadvantages of an Automobile Lease Takeover in Canada:
1. No Renegotiation: Unlike initiating a new lease where terms can be negotiated, assuming a lease means inheriting the agreed-upon terms between the original lessee and the leasing company. This lack of negotiation may lead to higher monthly payments or a greater lease-end purchase price.
2. Limited Mileage: Lease assumptions come with predetermined mileage limits. Exceeding these limits can result in additional fees. It's crucial to estimate your annual mileage needs and ensure they align with the existing lease terms.
3. Wear-and-Tear Costs: If the previous driver neglected vehicle maintenance, you could be responsible for wear-and-tear fees. Inspecting the car in person and negotiating potential fees with the original lessee is advisable.
4. Additional Costs: Lease takeover entails various fees, including lease transfer, credit application, and disposition fees. These fees can range from $395 to $895, and it's essential to understand and account for them before finalizing any agreements.
How to Assume a Car Lease in Canada:
Individuals looking to transfer their leases often list them on online platforms. Alternatively, reaching out directly to the leasing company may yield recommendations or potential connections with lessees.
Bottom Line: While assuming a lease can be a viable option, it comes with added responsibilities, considering the history of the original driver. You inherit any outstanding payments, damages, or fees incurred by the initial lessee. Thoroughly research and compare options before committing, checking the vehicle's history and calculating potential costs if you were to initiate a new lease or purchase.
