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Should you buy or lease? Should you get a loan or should you pay in cash? Typically, these are the questions people always ask and seem to stick to. There are advantages to both, depending on your tax situation.
How about the best of both worlds? I want to have my cake and eat it too, how about you? Most argue against leases because you’re limited in the miles you drive or if you like to keep your car a long time, leases don’t work out. That is mostly true for standard leases, that is what this article is not about…
For almost 10 years I have been getting my cars through lease take-over. It is exactly how it sounds. Basically, take over someone else’s lease on their car for the remaining term.
The advantages are many. I don’t need a down payment (they already paid it). The term is short (at least shorter than the original term). Also, in most cases, I look for leases where they didn’t drive as much as they could have so I have many extra miles to use for the remaining term. In some cases, I have actually been PAID to take over the lease (yes! got paid cash right at transfer).
What is the downside? Not much really. I suppose I don’t have complete control over the color combination or options on any one particular vehicle (but my focus is more on the deal, than color). When I looking to take over a lease, I have to be a little more flexible on what car I want (a limited edition model, for example).
The lease transfer process is pretty straightforward, most leasing companies have their own procedures and its a matter of filling out the transfer forms between yourself and the seller and they go between you and then back to the leasing company. Once its all executed, you meet up and they had you the keys. With paperwork and mail it takes 3-6 weeks (of course, you can overnight docs to speed this up).
The advantages are fantastic. I get the car I want (generally) at the right monthly payment, no downpayment, with a ton of miles to drive and the car is still under factory warranty.
Like with anything, you have to shop for a good deal and with life there are no guarantees. The 2 main companies that do this are www.leasetrader.com and www.swapalease.com
I have had experience with both and both do a good job helping with the transfer with status reports and updates.
Not every car listed is a good deal. One caveat, I tend to stay away from dealer listings. I stick to private lease owners usually in my state (so I can go see the car). Every so often, there will be unicorns. Unicorns are great deals because the owner put down a huge down payment (monthly is low) didn’t drive it much (tons of extra miles) and wants to get out (is willing to pay cash for transfer). Getting any one of these attributes is a major advantage over a traditional lease or purchase, but to get all 3 is amazing! It happens more than you think but it takes some looking.
Not having to shell out a down payment is a major advantage to conventional leases of purchases. In most States, leases enjoy less sales tax too. Purchasing a car with a monthly payment, just means you keep paying into something that is rapidly declining in value. Long term, you’re stuck with increasing service/repair costs every year. Also, let’s be honest, having an old car (paid for or not) is no fun.
Take a look at the websites and do the math for yourself. In my opinion, it is the best way to get a car.
Please let me know if your thoughts in the comments below…
