Like many small business owners, you may lease your work vehicles for tax purposes or other reasons. With the slowing economy, you may find yourself stuck with a long-term vehicle lease you no longer need. One viable option to research is vehicle lease transfers.

By definition, a vehicle lease transfer is an arrangement whereby a person or organization takes over the lease of a vehicle with the approval of the leasing company. By doing so, they assume the rights, responsibilities and liabilities under the terms of the vehicle lease agreement.

The Buyer’s Take on Taking Over a Lease

As with many business decisions, this one rides on money. You can save yourself thousands of dollars by assuming a lease—the down payment, the monthly payment, fees—they all add up. Moreover, some sellers are willing to pay you to assume their vehicle leases.

There are other, more tenuous reasons as well. You get to eliminate the dealer and the sales pitch and work directly with another consumer. For many people, this counts for a lot. Dealer incentives are not that appealing to many and the overall vehicle-purchase experience is not as good as it should be. Working with another consumer eliminates much of this. Also, in today’s poor economic climate, taking on long-term debt in the form of a new vehicle is not something that many people are willing to do right now. Taking over someone else’s lease is really more of a short-term relationship that offers people a level of financial flexibility. According to Sergio Stiberman, CEO and founder of LeaseTrader.com: “People have a higher comfort level and more control over their car shopping experience when they shop via the Internet as opposed to working with a dealer. When you take over a very short-term lease, you’re only picking up where the first person left off, so you avoid getting locked into a long-term financial commitment.”

The Seller’s Take on Taking Over a Lease

For sellers, the option of unloading a lease allows them a measure of financial flexibility as well. It is also a good way to avoid various lease-end fees for things like extra mileage and excess wear-and-tear (which could be in excess of 10 cents per mile) not to mention the infamous early termination fees assessed if you simply need to end the lease.

Still, even with the savings you could realize, having someone take over your lease may not be the right choice for you. Even if your leasing company is a fully willing party to your efforts, it’s important that you carefully investigate what you truly stand to gain from the deal. In 99% of the cases, according to Stiberman, it makes more sense to return the vehicle that you are not able to transfer through a lease assumption. “At the moment the initial car lease is made, the car leasing company sets a residual value for the vehicle that tends to be higher than what the market value of the vehicle is at (return) time.” Because of this, you may find it difficult to sell a car lease at a high enough price to cover your expenses entirely—but if nothing else, it does give you a chance to mitigate any losses you may be facing.

The Lease Trading Process

The process of doing a lease transfer is fairly simple and straightforward. In general, a buyer identifies a leased vehicle available for a lease transfer and contacts the owner of the lessee, also known as the seller. There are negotiations until a deal is reached and then the actual owner of the vehicle is contacted to affect the transfer. In the days gone by you may have had to do all this yourself, but now you don’t have to. Companies like LeaseTrader offer a great deal of guidance, provide credit applications for prospective buyers and offer other assistance to both parties that makes their participation worthwhile—not compulsory, but worthwhile. Still, there is nothing to say that the two primary parties to the lease transfer would not be able to work things out to their mutual satisfaction and then have the vehicle owner go along with it, but these organizations do go a long way toward making things easier for all concerned, especially in the matter of buyer credit. The owner will want to know that the prospective buyer is going to live up the agreement before they allow the original lessee out of their lease obligations.

Lease Transfer Resources

If you are not familiar with the territory, it is always wise to go with a guide that knows the ground. Your attorney is always a good place to end up, just make sure that everything is on the up-and-up, but to get you going, here are some resources that can guide you along the path to a successful vehicle lease transfer.

leasetrader.com
swapalease.com
leasedwheels.com
leasetrade.com
ehow.com/how_107450_transfer-leased-car.html