If you are not too convinced if by any chance is okay to take over a lease, then I suggest you take 5 minutes of your time and carefully read this article. Basically, I won't say today that every lease takeover deal is good. Like everything in life, it will ultimately depend on your needs, preferences, and possibilities, but today I will focus specifically on the tangible value (either because it was paid or because it will be) of taking over someone else's lease contract.
And with the tangible value, I mean directly the non-cash incentives that are part of a lease takeover: the "deal perks."
- The Original Downpayment
- The Original Trade-in
- Winter Tires / Accessories
- Extended Warranty
- Wear & Tear Coverage
Your Original Downpayment (from 1,000 to 5,000CAD)
And I mean from 1k to 5k as it is the average downpayment people make when leasing a vehicle. Just by itself, it is a way to reduce monthly payments that you will be saved from if you take over a deal. It is like if you were leasing a vehicle where someone else did a downpayment for you.
The only difference is that that person needs for transferring his/her lease contract is higher than the value that it may represent to continue leasing the vehicle.
A Trade In (may vary)
It works the same way as an original downpayment, but all of a sudden we are talking about a vehicle the current lessee haven't seen for a while. If at some point of the original deal, he/she traded in an old car, our had a leased vehicle that the dealership was interested in, then this is an extra value on the contract. Just see the following example (as If you were the one transferring your lease):
You had a 2009 Toyota RAV4 used as a trade-in in your deal for a brand new 2017 model. The previous RAV4 value was estimated to be 4,000CAD, so your current deal had a "4,000 downpayment" from your trade-in.
Although it didn't actually felt for you as a cash outflow, you did a downpayment on that original deal, making the current payment lower and making your current deal more attractive as 4,000CAD were already paid off from the vehicle MSRP. This is something that will sound great for people interested in keeping your car after the lease term reaches to an end.
Winter Tires (from 800 to 3,000 CAD)
In Canada, it is very typical to have two sets of tires: winter and non-winter (also known as all-season or just summer tires). In provinces like Québec, it is mandatory to use these from Dec 15th to March 15th.
When you take over a lease that comes with winter tires included, you get an extra asset than the vehicle. Winter Tires are not part of "the lease" and, while the car needs to be returned with tires, doesn't specifically need to be your winter ones.
To have a more clear idea of how much a winter tire set can cost, you can go to the CanadianTire website, but on average:
- Michelin, Motomaster, Continental and some other brands start at around 120CAD each tire and go up to 300.
- Some Pirelli & Dunlop Tires can cost up to 600CAD each.
Now, if on top of this, you add that these are mounted on Rims or even on alloy wheels, the plus is way more, although at this point it is rarer.
Still, these count as "accessories" as could be any additional:
- Roof rack
- Ski/snowboard rack.
- Cargo Box.
- Additional Floormats.
- and the previous mentioned Winter Tires & Rims
Extended Warranty (from 700 to 2,500 CAD)
Peace of mind has a cost, but the delivered value is astonishing too. In a recent article, I talked about the specific case of Toyota's Extended Warranty costs. Although costs and term extension can last up longer, the particular example of Toyota averages that for a five years lease coverage with 120,000 km total (24,000km/year), the average cost is close to 2,500.
The fact that you are transferring a lease contract with warranty coverage for the entire period is probably the first and primary factor people will search for when negotiating a lease transfer.
Wear & Tear Coverage (from 700 to 1,400CAD)
But it is not only the specific cost of the coverage itself. The real value of the Wear & Tear Coverage is the one it delivers at the end of the contract and during the transfer.
On average having a coverage between 7,000 and 10,000CAD for waived costs on physical repairs of a vehicle is fantastic. It even helps to smooth any possible transfer of the lease, as you wouldn't need to incur in severe repair costs.
Imagine How Valuable a "Combo" Would Be
Yes, having all elements on a lease takeover deal is as attractive as honey for bees.
I remember the first lease I transferred: It was a Nissan Rogue S with
- Winter Tires
- Extended Warranty
- Wear & Tear Coverage
- I did a trade-in plus an 800CAD downpayment
No cash incentive at all. Why? Because I leased it right and the tangible value added on top of the deal was more than enough to make it a fantastic lease takeover deal.