I have an opportunity to assume a lease for a '99 vette convertible. This is a lease with about 14 months left. The car is in excellent condition and the current "owner" wants nothing down, just take over the payments for the next 14 months. My question is "Has anyone had any experience in assuming a lease and how strict will the leasing company be in the credit approval process?" My credit is quite good now, but I had a chapter 13 about 5 years ago. Fico is in the mid 600 range. No late pays for the past 5 years. Leasing company has quite a bit of equity in the car.
You have to consider the terms and the reputation of t he leasing co.I was in the business for ten years and I have a BofA lease now.With a major bank I know the transfer would be smooth and most importantly the car would totally be out of my name at time of transfer.My obligation to BofA would be over.You need to find out what you would owe at the end of the lease,if you can just walk away,how many miles you're allowed to drive without penalty(up to 20 cents a mile)and what your total obligation would be. This is sometimes called the cap cost(selling price) money factor(interest) and residual value(what you owe at lease end.I would be skeptical if this lease company is a small independent dealer.Find out who is actually financing the car and find out if they are reputable.I just wan't to warn you to be cautious because you can get screwed on a brand new lease through a major car dealer and even worse on a used car lease.You can usually get an attorney to review the paperwork(someone familiar with contracts) for a nominal fee.It could be a good deal and speaking from experience you'll be a lot happier if you get all the facts in writing first.
Correct me if I am wrong but, I don't think you can assume a lease! Not unless there is a company out there who works different. I went through this with a company I worked for before they filled bankruptcy. They had leased cars that they wanted to get ride of. Might I add they where in a company name but co-leased by the CEO and she was going to be held responsible. She was ready to get rid of them and tried all angles. The company (BMW) wouldn't allow this at all. They explained to me that the company/Co-lease (your case the guy) who wants to get out of the lease would be breaking they lease and in return they would penalize her or him for this. So, I was going to have to apply to try to assume the lease. BUT.. she was going to still be penalized. Either way I was going to have to apply. So.. just to sum it up... I went to BMW.. and leased my own 1999 323i conv. (it was new at the time)! With my mom as co-lease OF COURSE...lol..!!! Maybe.. If you are good friends or close relatives, to keep from hurting his own credit, maybe he may let you take up the lease payments until it ends. I hope this helps.... MartysGirl
ON THE RADIO IN DENVER...on a financial related show...they were talking about ASSUMING A LEASE...he said you have to GET THE LEASING COMPANY'S OK, NOT just on ok from the person who leased the car...
Thanks for your input. I understand that the leasing company must approve the transaction. That is my question. How strict will the leasing company be in approving this deal. I would think that if 34 out of 48 payments have been made on time, they have little to nothing to lose at this point, so they might be more willing to approve a marginal application. By the way, there is a $350 transfer fee to do the deal.
Thanks for your advice. I am familiar with car leases as well. Assuming there is no catch at the end and I do not go over the miles limitation. I am ok with the lease aspect. I am just concerned with how strict the leasing company is in the approval of the transfer.
direct, I can see you Want This Car. So, find out who the lease is with and call them. Just give them ball park figure and see what they say. It can't hurt...Then you can go from there.. Keep us posted.... MartysGirl
If you have a recent copy of a credit report...take it to them and ask them to give you a YES or NO based on what they see on the credit report...(MAKE NOTES ABOUT CHANGES ON THE REPORT)...there is ALWAYS wrong information on 90% of credit reports... IF YOU GET A NO...YOU SAVE A "HARD" INQUIRY...AND YOU CAN WALK... IF YOU GET A YES...THEY MIGHT STILL SAY NO...AFTER THEY RUN THEIR OWN REPORT...
