Assuming a Lease: The Pros and Cons of Lease Takeover

Are you looking to get a new car? Leasing could be a much better option for you than buying.

But, what if your current financial situation won’t allow you to take a full lease?

Well, a lease takeover might just be what the doctor ordered. It combines the luxury of having a current car without the heavy financial burden that traditional leasing carries with it.

This article takes an in-depth look into the pros and cons of lease swapping, and why it's a viable option. Read on.

What Exactly Is a Car Lease

If you want to drive the latest car model of your favorite brand at a fraction of the price you can get it for a fixed period and at an affordable monthly rate. The best part about it is that it doesn’t come with all the bureaucracy and paperwork associated with getting a car loan approved.

Monthly lease payments go towards using the vehicle as opposed to owning it. That way you get the best of both worlds. Think of it as a long-term rental.

At the end of the leasing period, you have the option to purchase the vehicle at the current market value or return it to the car rental company. To get a car lease, you'll have to make a downpayment on it and commit to a series of affordable monthly installments.

Each installment comprises the rental charge, interest, relevant taxes and the depreciation costs of the vehicle for the period of the lease. If you are someone who often struggles with commitment issues like not being able to decide which model you prefer or what color the interior of your car should be, then leasing a vehicle is the best way to go.

There’s also the added perk of always being up to date with the car manufacturer’s latest features. And, with the warranty still in force every time you get a new car, you get to enjoy free servicing and oil changes every so often. So, if you think about it, you’re actually saving money in the long-run.

Leasing a Car vs a Lease Takeover

Remember, a lease is a long term, legally binding contract that commits the lessee to use the vehicle for a fixed period stipulated in the contract. In Canada, this could be anywhere between 2 and 4 years.

However, the lessee may want to get out of the lease earlier than intended. That’s where the idea for a lease takeover was born.

This essentially involves transferring the lease from the “lease seller” to the “lease buyer”. The lease seller refers to the individual looking to get out of his lease early. Once they transfer the lease to you, you become the lease buyer. The lease seller is basically looking for someone who will take over the contract along with the car.

The fact that the lease seller is looking for you to take over their lease, gives you the upper hand when it comes to negotiating how much you’ll buy the lease for. So, depending on what the initial terms of the lease were, what the lease seller is offering and what the current condition of the car is, a lease takeover provides you with the cheapest option in car acquisitions.

How can you ensure you’re getting the best possible deal when taking over a lease? Here are 3 key factors you need to look out for before jumping the gun.

The Car Lease Kilometer Limits

In Canada, lease agreements usually cap the annual mileage at 25,000 kilometers. Going above this amount means incurring extra charges for kilometer overages incurred.

Before you take over a lease make sure that the car in question has not used up its annual allotment. It’s also highly advisable to estimate the mileage you intend to use for the rest of the year so that the mileage left is more than enough for you.

Failing to plan is planning to fail. So, if you want to get the best deal, you better do your homework.

Wear and Tear of the Vehicle

Get your hands on the lease contract document and scrutinize the guidelines with a fine tooth comb. Most lease agreements define what normal wear and tear entail, and what would be considered excessive wear and tear.

If you’re not careful, you might end up being on the hook if the present condition the car is in violates what would be termed normal wear and tear. Normal wear and tear mean that the items in question are easy to fix and cheap to replace. Excessive wear and tear, on the other hand, is bound to leave a dent in your wallet.

Hidden Leasing Fees

Look out for hidden contract fees. These are not easy to spot right away. There could be “Turn-In” Fees, “Lease Transfer Fees” or other penalties the leasing company might charge you for, like outstanding violations.

As much as you may be better placed to learn about the vehicle’s history than if you were buying it from a complete stranger, you need to get a comprehensive history of the vehicle. Check for evidence of previous accidents to get a general sense of the condition of the car. A mechanical inspection is always a good idea.

Why Would Someone Want Their Lease Taken Over

There are numerous reasons why the lease seller may want to opt out of their current contract. However, there are 2 common reasons why they would want out.

The first is: They may no longer be able to afford the monthly installments. Life is full of ebbs and flows. The seller's current circumstances may not be what they first were when they got the lease. So, it only makes sense that they may want a cheaper alternative. Second: They’re sick of their current car and simply want a new one. Selling their lease would be the fastest way to get out of their current contract.

In some other instances, it simply becomes impractical to drive the current car. If you’d leased a 2 door sports car and you recently got a new baby, you can see how that would pose a bit of a conundrum.

Pros of a Lease Takeover

Taking over a lease is beneficial to all parties involved. The lease trader gets to opt out of their lease while the buyer gets a potentially excellent vehicle at a fraction of what they would have paid if they leased it directly from the leasing company. Here are some of the top advantages of taking over a lease.

No Downpayment Necessary

The current lease seller of the car may have traded-in their old car or made a substantial downpayment as a tradeoff to getting smaller more manageable monthly payments. When you take over a lease, you get the low monthly installments without having to make any lumpsum payment.

Enticing Cash Incentives

Remember the “upper-hand” mentioned earlier? The seller may want out of the lease so badly that they’re willing to offer you cash incentives to buy the lease. These may be in the form of footing the take over lease transfer fees that the leasing company may charge for the transaction.

Get the Best Terms with Not-The-Best-Credit

In order to lease a car, most leasing companies require that you have a great credit score. However, to swap a lease, you only need to have good credit.

Your current credit score may not have afforded you their top-tier terms, had you leased directly from the company. But, once the lease transfer is complete, you get those same terms with not-the-best-credit.

Get All the Leasing Rights

Taking over a lease means, you take over all the bells and whistles that came with it when the original lessee had it. The first of these is the warranty coverage.

Most brand new vehicles come with an airtight 3-year 36,000-mile warranty. This means that all costs that would have otherwise been incurred in spare parts, labor and repairs are all covered by the car manufacturer. Taking over a lease within that initial 3-year window means you won’t have to worry about incurring out-of-pocket expenses to pay for repairs.

Second, are the lease-end options. Once the lease period expires, the lessee is presented with a list of options that are now available to the individual who’s done the lease swap.

Assuming a Lease: The Pros and Cons of Leas Takeover

Mercedes-Benz car lease contracts are among the most popular for Lease Takeover.

They could either buy the car for a specific amount of money which is usually the current market rate of the car. Alternatively, they could turn in the car and leave.

The third option they have is, they could trade in the car for another leased vehicle and take advantage of the competitive incentives and rebates that are exclusively available to them. Lease-end protection is worth considering.

Cons of Taking over a Car Lease

Sometimes, the reasons why people may want out of a lease might not be so noble. For instance, the lease seller may have racked up massive amounts of miles on the vehicle and they want to pass on those costs to you.

Or, the car has suffered excessive wear and tear that would cost them loads to fix. By taking over the lease, you also take over the potential liabilities that come with the car, regardless of the fact that they happened way before you took over the lease. Some other cons you need to factor into your decision to assume a lease include:

Tons of Legwork

Walking into a car dealership and leasing a brand new car is quite a straightforward process. You’re already guaranteed that the car you’re leasing is in mint condition since the cars are usually spanking new.

The same can’t be said when you’re taking over a lease. You have to be willing to do lots of due diligence to find the right lease to take over.

Settle for What’s Available

When you’re looking to swap a lease, you may not get a car that fits your exact specifications. You’ll either have to wait until the car whose lease you want to take over turns up.

Or, you’ll have to settle for what’s available. Either way, you’re going to have to be patient.

Lots of Fees

When assuming a lease, you could save on the monthly payments but, escaping the fees associated with transferring the lease might prove difficult. One of these is the application fees.

You may also have to pay the leasing company to do a credit check which doesn’t guarantee that they’ll transfer the lease. The company might also charge you for the transfer fees which goes towards doing all the required paperwork to process the transfer.

In addition to these, there are also the lease-end fees that most companies charge on the car mileage and excessive wear and tear. You could end up paying for damage you didn't cause and mileage that you didn't drive.

The Bottom Line

A lease takeover has lots of moving parts. If you’re willing to do the leg work, it’s a great way to save a ton of money and drive a swanky new car while you’re at it.

Lease swaps aren’t easy to come by. But when you do, you can use the information in this article to weigh the pros and cons to determine if it’s right for you.

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About the author

Jorge Diaz is a passionate car lover, winter driver & Software Engineer. For the last 10 years, he has built Online Solutions used by more than 5,000 companies across the globe. He founded LeaseCosts in 2016 with the purpose of simplifying and helping Canadians to better understand the complex market of car leasing in Canada. You can connect with him at

Jorge is also the author of Car Leasing Done Right: A Canadian Guide for Understanding & Optimizing Vehicle Leasing Costs, released on Nov. 5th, 2021. It is available at