If you’re like me, you hate going into the car dealership. Not only does it take forever, you never feel like you are getting a good deal. I don’t care if you love driving Hondas or Ferraris, the math behind going to a car dealer is never in your favor. It’s one of the only depreciating assets that the second you buy it, it goes down in value.
Personally, I’ve always been a fan of car leases. While I get the value in purchasing a used car & extracting values for years, having older technology & constantly putting money into a car isn’t something I enjoy. For these reasons, I’ve always went down the car lease route.
After doing some digging, I came to realize that there’s a little secret with car leasing that many simply don’t know about. Did you know, you can takeover someone else’s car lease? For instance, let’s say your co-worker (let’s call her Amy) has a Mercedes. Lets say Amy put $8,000 down on the car, and pays $500/month for a 55k Mercedes. The lease was for 36 months and Amy has 18 months left on the lease.
When someone has a car lease, you don’t have many options if you are trying to get out of it early. Technically, you only have 3 options
Option 1 – Buyout
Every lease has a buyout option where you turn that lease into a vehicle you actually own. The issue with that is two fold. Generally, these buyout numbers are never that great (remember, the car depreciated the second you left the lot). Also, you know how to spend a high chunk of money to buyout the lease. Chances are, you’ll need to finance it (which comes at a pretty large fee regardless how low interest rates are). Remember, you are paying interest on something that will only go DOWN in value.
Option 2 – Turn it into the Car Dealer Early
Sounds great in theory, but that math behind it is horrible. Let’s look at our Amy example. She has 18 months left on her lease @ $500/month. In other words, she still has to pay $9,000 (18 months * $500) to complete her lease. The dealer isn’t going to let Amy off the hook on the $9,000. All the dealer will do is take that $9,000 and roll it into your next car payment! That’s horrible isn’t it. Now you are paying for 2 cars that will only go down in value!!! Of course, the car dealership won’t get into these details with you. Their job & their compensation is based on actually selling cars. The sales rep will simply show you the advantage of getting into a new car at a discount, while just paying ” a couple dollars more a month”. BS!
Option 3 – Transfer Your Car Lease
Over the past few years, this has been my absolute favorite. So much in fact, that I don’t go to the dealership to get cars anymore. Let’s suppose I went up to Amy & said I’d love to takeover your lease. Not only would she gladly do it (considering her option), she might even pay 1-2 months of of the lease. Think about it. You are getting a 55k vehicle, getting $1,000 back, and paying $500/month for 18 months. You are actually ahead of the depreciation curve! Add to that, you are completely covered with the manufacturer. So you can still go back to the Mercedes dealer to get it serviced if there’s an issue, and not pay a dollar (as long as it’s something that is covered on a new vehicle).
In order for lease transfers to work, you need to look at car lease transfer marketplaces like LeaseTransferClub.com. Lease Transfer Club is a marketplace filled with sellers looking to sell their lease & with buyers looking to takeover leases. Presently, this lease transfer site is completely free to use for sellers & buyers. Take a look and see, who knows, you might even be able to get out of your lease (or get someone else’s) earlier than you thought!