If you haven't ever been involved in a Lease Takeover (or Lease Transfer), you will find the following article very useful. The thing is that when you need to transfer your contract to someone else, there are multiple things you can do to speed it up, avoid headaches and make it all worth.
0 - Know Your Credit Score
This is vital. You will regret transfering your current car if you don't have a good credit score to jump into the next one. First, always check your credit score to avoid unpleasant surprises. Our partner agency, Borrowell Canada, offers a FREE Equifax Credit Score in only 2 minutes.
If your credit score is low, then there is a red flag. Just ensure to Build It Up before doing anything else. A low score will seriously affect the deal you will get after transfering your car.
1 - Review Your Paperwork
It is crucial that you check your original contract documents to refresh and ensure every number is OK. You will need these to negotiate how you will transfer your contact and, in fact, this is what people will really care about.
The following details will be the main point of interest of the person you are looking for:
- Payment before taxes & after taxes (varies depending on the province)
- Payment frequency (bi-weekly, monthly...)
- Total Lease Term and Remaining Terms (in months preferably)
- Lease End Date
- How Long the Warranty Remains
- Any Additional Coverage, Lease End Protection...
All these elements "describe" your lease and will become the responsibility of someone else. Make copies and ensure to give these to the interested person. The clear the process, the more successful it will be.
2 - Evaluate Your Incentives
There are multiple incentives you can offer on an actual lease takeover. Some come with the vehicle, and some other can be added on top of it. The default incentive is to use cash, but there are different ways to do it:
- Pure cash: And this is the simple way of "I give 1,000 CAD to whoever takes my lease." It will ultimately depend on how good was initially the deal you got from the dealer.
- A free month: Let's say your payments are the 5th of the month. You can coordinate with the new "owner" of the lease to take it over starting on the 6th or the 7th. That way they won't be charged until the next payment and would run a full month by you.
But there are some other additional incentives that are actually part of your deal or the vehicle itself. Let's assume the following example: Your current car has
- Tinted Windows
- A Roof Rack with Ski/Snowboards support
- An Installed Remote Starter
- Winter Tires & All-Season Tires
You can offer it without the Winter Tires (maybe you plan to keep these because you got these separate) and then negotiate these with the new owner. In the case of the Roof rack, I added it on purpose: there is a chance that this was settled on the original deal and part of the payment too. You need to carefully analyze what is part of the initial amount and what was added by you.
3 - Project a Timeline
Running a complete lease takeover may take from a couple of days to months, depending on "how attractive" is your deal for other people. Remember that if you are offering a contract at the same price as the new vehicle at the store and for a similar term, no one will go for your deal.
Estimate that at least there will be 2 or 3 months of search if you got an average deal unless you come up with a good incentive.
But still, the first thing to make the ball roll all the way down, is to post it right now in our Lease Takeover Marketplace. Otherwise, you will be wasting time and the chances to gain visibility among our audience.
4 - There will be Associated Costs
Put money aside for it. Even if you plan to promote the listing on Kijiji or anywhere else, your rush will define how much you want to "promote" and increase the visibility of it.
Still, once you go to the dealer, an approximate between 299 - 799 will be paid for lease takeover fees. Remember all the paperwork needs to be prepared again, a new credit check to run for the new lessee.
5 - Ask People You Know
To avoid a "But why didn't you tell me?!?! I loved your car!!", Feel free to ask anyone you know that may be a minimal chance of being interested in it. Family, friends and work colleagues already know the vehicle, may even know how good your deal was, then there is an excellent opportunity to speed up everything.
Remember that the fact that you need to transfer your lease isn't a big deal if you already have someone interested in it. Even before starting with all the process, you can just comment out that you may be interested in doing so. You have nothing to lose.