Transferring a car lease can be a way to get out of your leased vehicle without paying early termination fees. But can you take over someone else’s lease if you have bad credit? Here’s the deal on lease transfers and takeovers.
How a Lease Takeover Works
When you do a lease takeover, also called a lease transfer or lease assumption, someone else’s lease is transferred to you. You're responsible for all the remaining payments and the original terms of the lease set by the leasing company.
However, you must also qualify for the car lease, and must submit your credit information to the leasing company to be considered for the transfer. There are restrictions on lease takeovers, and they vary by leasing company, and they may have different rules. But typically, a lease takeover goes like this:
5 Steps to Taking Over a Lease
- You submit a credit application that requests you take over the lessee’s lease contract.
- The leasing company decides, based on your income, debt to income (DTI) ratio, credit score, and a few other factors – everything that would normally be considered when you apply for a car lease. Leasing companies may also have restrictions, and could deny you regardless of your ability to pay, or your credit score and credit profile.
- If you’re approved, the leasing company transmits the documents to you and the lessee to be signed and sent back. Keys are exchanged, and the revised contract is finalized.
- The leasing company sends you and the lessee confirmation letters and begins sending the monthly lease statements to you. A transfer fee may have to be paid, as well.
- You’re now the lessee! You assume the lease and are now responsible for it, including paying for any extra mileage, excessive wear and tear, and insuring the vehicle.
Assuming a Lease With Bad Credit
With a lease takeover, you still need to qualify for the lease in terms of credit score, income, and DTI. If your credit score and the original lessee’s credit score are similar, and you meet the other requirements that were originally set with the lease, the leasing company may consider the lease transfer. If you don’t have the income to afford the monthly payment, you aren’t likely to get approved even if your credit score is close to the original lessee’s.
If your credit score is significantly lower than the original lessee’s, even if you have the income needed to make the payments, the leasing company most likely won’t approve the transfer, either.
Keep in mind, leasing is normally for borrowers with good to great credit scores. Taking over a lease isn’t impossible with bad credit, but it isn’t easy.
Auto Options for Bad Credit Borrowers
Leasing is usually for those with good credit, and it can be difficult to get approved for a lease, take over a lease, or finance a standard auto loan with an imperfect credit score. Luckily, there are subprime lenders that work with bad credit borrowers.
If your credit score is less than perfect and you need financing, we want to help. At Auto Credit Express, we’ve teamed up with dealerships around the country that work with bad credit lenders. We connect you with a dealer near you that has special financing. To get started, simply complete our free and easy car loan request form.