Pros of a Used Car Lease
Afford a Luxury Car You Would Normally Not Be Able to Afford: Do you have your eyes set on an Audi or Lexus? A $40k or $50k vehicle might not fit in your budget, but a lease might make it a possibility. Used car leases are best for vehicles which retain their value. Used high-end vehicles are perfect for leases. Range Rover, Mercedes-Benz, and other luxury brands often hold their value, which makes leasing a good option. Easily Trade It for an Upgrade Without the Hassle of Selling It: The burden of selling a car is real. Finding a buyer and negotiating a price are a hassles that many want to skip. Lots of people just trade it in to a dealer, which often leaves them shortchanged. A lease makes the process easier, because the terms were decided at the beginning of the deal. Get a Short Lease: Signing up for a lease swap means you are getting a lease in the middle of its lease term. The length of the lease could be two years, one year, or possibly even shorter. This could be a pro if you just want to try out a make and model or only need a vehicle for the short term.
Cons of a Used Car Lease
Older Cars Have More Problems: Well we all know cars do not work better with age. Leasing a used car means it already has some miles on it. Some of the first things to go on an aging vehicle are the in-car electronics and they can start making noises and getting leaks.Acquisition Fee: Whether you are buying from a lease trade site or a dealership there is probably an acquisition fee to take over the lease. It might be possible to find a financial institution that does not charge a fee, but many charge as much as $895.Warranties Get More Expensive: Bumper-to-bumper warranties are certainly the best, but they can be harder to get with older vehicles.It Is Harder to Determine What the Future Value Will Be As a Vehicle Ages: Leasing costs are usually based on the estimated value of the vehicle when it is turned back in. Determining what that number will be becomes more difficult as the vehicle ages. As a result, the vehicle may be estimated at a lower value, and you would be stuck paying the difference.
Online Lease Swaps
Getting a used lease or getting rid of your current one has never been so easy. A few websites lay it all out for you and do most of the legwork. The top online lease swap websites include:
SwapALease.com is a modern-looking site that offers a lot of other services to help you in the swapping process, such as lease calculators and vehicle inspections. LeaseTrader.com is a leader in the industry. Search by category or hot deals to find the car of your dreams. LeaseQuit.com provides step-by-step instructions on how the process works.
Taking over someone’s lease can make a lot of sense. It can get you into a car that you may not be able to afford to buy outright. It can be debatable whether or not a lease is a good idea in the long run, but it really is a personal choice. The ability to take over someone else’s lease opens up new possibilities and makes it so you do not need to be under contract for such a long period of time like a traditional lease.
Taking Over a Lease
Sellers often offer incentives for someone to take over their lease. It never hurts to ask for more. Ask for the first or even the first and second payment to be paid for when you take the lease over. Often, the seller wants out of the deal so badly that they will gladly pay ahead. Limits of Liability: It is common for states to require as little as 25,000/50,000 limits of liability. However, you might find a leasing company requiring limits of 100,000/300,000. By signing the lease agreement, you are agreeing to their car insurance requirements. Comprehensive Coverage: Physical damage protection is certainly not only in your best interest but also in the leasing company’s best interest. Comprehensive coverage protects against any kind of physical damage other than a collision. Hitting an animal, storm damage, fire, theft, vandalism, and windshield damage are all covered by comprehensive. Collision Coverage: Hitting any inanimate object is considered a collision. Backing into a mailbox or garage is a collision. Hitting a guard rail is a collision. Hitting another vehicle is also a collision. Collision coverage is almost always required by your leasing company. It wants to make sure its collateral is fully repaired after any accident. Deductibles: Leasing companies can also stipulate what deductible you need to carry. They do not want high deductibles because it reduces the likelihood of you getting the vehicle repaired. Plan on $500 deductibles, many do not allow $1,000 and above. Third Party Insurance: Fail to purchase enough coverage, and they will take out a third-party car insurance policy. A third-party policy covers your vehicle for physical damage but not for liability or medical expenses. The cost is usually much higher than purchasing a traditional policy. The leasing company will then send you the bill for the coverage.
How Does the Leasing Company Know About Your Car Insurance Coverage?
You will be required to add the leasing company to your policy as a loss payee and additional insured. The leasing company owns the vehicle, too. It is loaning it to you for a period of time for a set dollar amount. If something happens to the vehicle, it wants to know. If something changes on the car insurance policy, it wants to know about it. Adding the company to the policy as loss payee makes it so all changes are mailed to both you and the leasing company. Adding it as additional insured will make it so all claim checks are made out to both you and the leasing company. It is very easy to add a loss payee and additional insured. All you need is to provide the correct mailing address that your lease company designates to your car insurance agent. If this step is not done or is not done properly, the leasing company will notify you, and if it is not updated, it will purchase third-party car insurance.
