A lease swap lets you get out of your long or short term car lease. It paves the way for taking advantage of other car lease deals or simply walking away from the automobile. Is it legit? Should you try lease swapping today? What are some of the hidden dangers?
Lease swapping is legit
Check your car lease; there is undoubtedly some verbiage about letting a third party take over the lease, vehicle and payments. While it costs quite a bit of money to terminate the lease early, agreeing with another person to do a car lease takeover may only result in the payment of a few administrative fees — for the original lease customer.
Caveat: Read the fine print; if the lease swap partner decides to stop making payments, you may still be on the hook for the costs. Moreover, not all lease agreements stipulate to a lease swapping arrangement.
There are advantages for both parties
Car lease deals are so popular because they allow for lower monthly payments than car loans. Concurrently, they are stumbling blocks for drivers who go over the agreed upon mileage allowances. The original lease customer realizes the advantage of getting out of a lease he can no longer afford – or get rid of a vehicle that no longer meets his needs; the second customer gets away with jumping into a lease without making the initial up front down payment.
Caveat: The second lease holder has to prepare to meet the end-of-lease costs, including the potential for a costly buy-out.
Lease swapping 101
Verify that your leasing company allows lease swapping. Confirm that your name will be removed from the lease agreement, once another consumer takes over the arrangement. (If this is not the case, you should find a way to monitor that payments are indeed being made on the car so as to protect your credit rating.) Inquire about fees and prerequisites; for example, your leasing company may require any subsequent customer to qualify for a lease via credit check before being allowed to participate in the lease swap. Advertise your car lease. Choose between industry insiders, such as Lease Trader or Swap a Lease, research their reputations and learn about their fee schedules. Decide if it is cheaper to try and find an interested lease swap partner yourself or with the help of an agency. Negotiate the deal. Do you want to get your initial deposit back? You may be out of luck, if your lease company refuses to return it or the lease swapping partner is unwilling to pay it as part of the lease deal. What is more, while some car lease takeover fees are set by the leasing agency and the listing group, other agreements are made expressly between the swap partners. Enforcing these terms is up to the individuals.
Are others doing it?
You bet! Just today, Swap a Lease published a PR Newswire press release that showed an increase in Cyber Monday buyer registrations of 35 percent. As early as June 2009, Lease Trader highlighted that it saw a 29 percent increase in Denver car lease takeovers over a span of 10 months.