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Can I Take Over A Lease With Bad Credit?

Depending on the specific circumstances in which you find yourself, it can often be a clever financial decision to take over somebody else’s car lease.

Why Would Lessees Want To Get Out Of The Lease?

For one thing, leases can last varying amounts of time, but typically not fewer than two and not more than five years. Lessees (the name for people on the receiving end of the lease) may come to the conclusion that they want to get out of their lease before the allotted amount of time has expired.

This can transpire for a number of different reasons, but chief among them are if the lessee no longer enjoys the car (as much as we love automobiles, we have to admit that we’ve been on the receiving end of this one more times than we can count), or because they can no longer afford the payments.

Another reason for wanting to bail out of your lease is because you’ve come across some kind of drastic lifestyle change which necessitates a different kind of car. Cars can outlive their purpose just like any other product you can buy, so it makes sense that at some point, the car you’ve leased simply doesn’t suit you any longer.

What Will Happen?

If you do decide to take over a lease, you’ll find yourself responsible for the rest of the payments. You won’t have to pay any money for the payments which have already come and gone, thank goodness.

But you should rest assured in the knowledge that there are so many people who want to get rid of their leases that there are now a whole range of websites designed specifically to fulfil this exact need.

Pluses

There are benefits to assuming a lease, however. It’s not all doom and gloom. One of the main advantages is that you’ll have an easier time coming across a specific vehicle you may have had your eye on for some time.

Some drivers have come to realize that leases are just an easy, risk-free way to test drive a car for a long period of time—up to and including 18 months, after which point they can either decide that they like the car and want to stick with the lease, or they can themselves shift the lease on to somebody else and continue their search for the perfect automobile.

It’s not generally possible to duplicate a short-term lease, however, which is well worth taking into consideration if you want to choose this possibility over a more traditional bad credit car loan.

Convenience

People who find themselves with a temporary assignment in a certain place of work (abroad, for example, or in a new city in which they have yet to put down any roots) can often find it a good idea to adopt a short-term lease, so that they don’t have to commit to a complete lifestyle decision while still managing to avail of the many benefits afforded by having a car, of which convenience and liberty are only the most common two.

Pricing Reasons

A taxi fare meter.

For another reason to consider taking over somebody else’s lease instead of pursuing a bad credit car loan, lease payments are usually much lower than purchase payments. This has to do with the inherently short-term nature of the deal.

If we can be so bold as to create a general rule of thumb for such a complicated topic as bad credit car loans, we can claim with some authority that the longer the lease term, the lower the monthly payments.

The payments will be even lower if the original lessee traded in their car or made a down payment at the negotiation stage of the bad credit car loan deal. In contrast, taking over a lease doesn’t ever require a down payment.

There are usually some kinds of transfer fees involved, which after all, just makes sense: there’s no way you’d be able to assume somebody else’s financial obligation at such great benefit to you without at least some costs involved.

Fortunately, during the negotiation stage of the process (just as with bad credit car loans), you can make use of an arbitrator to decide that the seller of the lease has to pay these fees. This will work out better or more poorly depending on how keen the lessee is to free themselves of the lease in the first place.

Minuses

As with any financial agreement, however, (and bad credit car loans are certainly not excluded from this principle), there are downsides. For one thing, there are often mileage limits to the lease: 12,000 miles a year is a typical caveat, with every mile over the limit coming at a cost of around 15 cents or so. Keeping that in mind, you should be sure to take a careful look at the odometer.

Oftentimes with bad credit car loans, the odometer may have been fiddled with to sweeten the deal in one party’s favor or another, so if you’re in any doubt, don’t feel hesitant about asking a professional mechanic to come and take a look at the instrument.

You can also, should you feel like you want to, negotiate some kind of cash payment to mitigate the downsides of an over-driven vehicle, but that will have to be worked out prior to accepting taking over the bad credit car loan, just as with every other kind of financial decision.

Do Your Due Diligence

Somebody looking at something under a magnifying glass.

For another thing, at the end of the lease the car must be returned in good condition. If you take over a lease for a car that’s already in bad condition, you’re asking for trouble. Therefore, as with any bad credit car loan, you should take care to ensure that all the proper maintenance on the automobile has already been carried out.

While it’s common practice to make sure that any mechanical issues arising from a leased car are covered under a warranty—and they usually are—it makes sense to check it out, given that because it’s slightly different from a typical bad credit car loan there are different rules and sets of guidelines which apply.

If you’re in any doubt about the mechanical state of the vehicle you’re planning to take under your wing, as it were, we recommend having a mechanic you trust give the automobile a thorough once over before you ever sign anything.

To tell the truth, it’s probably a good idea to do this anyway. While most vehicles covered by bad credit car loans are in good condition, there are a wide range of different issues that can be hidden under the surface and aren’t easily discovered until it’s too late, and you’re broken down on the side of the road.

Causes For Worry

A man, clearly worried, sitting on a couch.

Superficial issues such as scratch marks or worn-out interiors, while annoying, are not the biggest thing you should worry about. More telling problems are often indicated by the engine warning lights flashing (even though every salesman will tell you to ignore these, you never should), as well as a wide-spread issue throughout the vehicle with the electronics.

It’s not that the electronics themselves are difficult to patch over: when it comes to the issues that may rear their head with a bad credit car loan, electrical problems are among the easiest to fix. But if there’s a problem of some sort with all of the electronics, this could be evidence that there’s some internal flooding taking place in the vehicle, which can have altogether more drastic consequences for the longevity of the car itself.

If you’re still not sure about the car’s history even after consulting the mechanic and ensuring that there are no warning lights flashing about the engine, it’s possible to pay for a vehicle history report on the internet, which will be able to conclusively tell you whether or not the car has been in an accident, or if the odometer has been wound back to give the illusion of fewer miles driven. When it comes to bad credit car loans, you can never be too careful, and the same applies to leases as well.

How To Go About Taking Over A Lease

If you’re sure that you do want to assume the lease after all, there are a few steps you need to go through in order to make sure everything with this kind of bad credit car loan is above board. The first thing you’re going to want to do is have your credit score checked.

This needs to happen before you negotiate with the lessee—it can happen during the course of negotiations but that puts you at a disadvantage when compared with the position you’d be in if you already knew your credit score.

The company in charge of the lease isn’t necessarily going to disqualify you straight away just because your credit score isn’t ideal. All they’re worried about is whether or not you\re going to be able to fulfil the terms of the lease as stated in the original paperwork.

Like with any lender working on a bad credit car loan, the priority is to engender a total release of liability: keeping this in mind, the agreement is likely to be negotiated between you and the lease company directly. At this point, there’s not much need for input from the original lessee.

As long as your credit isn’t too terrible, you should be qualified to take over the lease. The good news, though, is that because you’re adopting the exact terms of the original agreement, there’s not going to be an issue with the typical tiered pricing you may have come to expect from your credit score.

With most bad credit car loans, the lower your credit score, the more you’re going to have to wind up paying in the form of interest. This is where taking over a lease differs from the majority of cases.

Because there’s already a deal in place, all you need to commit to is your ability to keep up the lessee’s side of that particular deal. As ever, you’re going to want to be able to prove that you can fit the lease repayments into your monthly outgoing expenditure budget—this should go a long way towards mitigating the negative effect of a poor score when it comes to all bad credit car loans, and taking over prior lease agreements are no different.

Conclusion

There it is—everything you need to know about whether or not you can take over a lease with bad credit. The short answer is yes, but in this more long-form answer we hope to preempt some of the most commonly asked questions, the answers to which can remain elusive to even the most experienced of bad credit car loan specialists.

Here at OttawaBadCreditCarLoans.ca, we don’t discriminate between applications we receive based on the credit score of the applicant. Everybody is considered equally. With that in mind, if you’ve been having trouble securing approval for a bad credit car loan because of your score, why not get in touch? We’d love to figure out how we could help you, no matter what the specific circumstances are that you find yourself in at the moment.