Leasing a new car and buying a used car are widely regarded as the two best ways to save money when shopping for a vehicle. But for many people, the smartest move is to go with a car that somebody else has leased. By taking over the lease on a used car, you can get the best of both worlds.
Getting a car that somebody else has leased is known as a lease transfer or assuming a lease. Assuming a lease offers several advantages over buying used or leasing new. These benefits include:
- No down payment – Some of the cost involved in leasing a new car comes from the down payment. The larger the down payment, the lower the monthly lease payments will be. When you go with a car that somebody else has leased, you get the benefit of the lower monthly payments without the down-payment expense.
- Shorter lease terms – The longer the car lease, the lower the monthly payments. By getting a car that somebody else has leased, you essentially get a short-term lease that has the low payments of a long-term lease. You also don’t have the long-term commitment, which gives you the flexibility to change cars more frequently.
- A nicer car – By definition, a lease vehicle will be a late-model, low-mileage car. And many car leases are for luxury vehicles, which are easier to afford on lease terms.
- No unexpected repair expenses – Newer vehicles are more reliable and less likely to need repairs. Even if they do need repairs, most lease vehicles are still under warranty.
- No hassle of trying to sell a used car – At the end of the lease, you just return the car to a dealership. You don’t have to find a buyer for it or take the risk that it has depreciated in value more than expected.
- Incentives – In some cases, the original lease owner may include a cash incentive for taking over their lease.
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