Lease Takeover Guide

A leasing contract implies a long-term commitment. Therefore, when choosing a vehicle, you opt for one you can drive for a long time. But what if you need to terminate the lease prematurely because the vehicle no longer suits your current life situation? An early termination of a lease comes with significant costs, such as mileage compensations. If you want to avoid that, consider the option of a lease takeover. Are you interested in leasing a VW, Renault, or Opel but don't want to commit for such a long time? In that case, a lease takeover is also intriguing. CARIFY will reveal all the details about it in this guide.

What is a Lease Takeover?

With a leasing contract, you enter into a binding long-term commitment from which you usually cannot opt-out easily. This rigid model comes with significant disadvantages if the lessee can no longer fulfill their obligations. A financial disaster looms: penalties, lost deposits – not something you want to deal with in a financial emergency. Even the leasing bank has an interest in avoiding the contract's termination. Besides financial problems, there are other reasons why people want to exit existing leasing contracts:

Your leasing contract still has several years left when you are expecting a child. Soon, your vehicle will be too small for strollers and baby gear. Or you undergo a professional change that reduces your need for long-distance driving. The large SUV now proves to be uneconomical. Maybe, for health reasons, you can no longer drive a vehicle or need to give up your driver's license for an extended period. Everyday scenarios that can happen to anyone.

To enable you to exit your leasing contract easily and without significant financial losses in such cases, there is the option of a lease takeover. In this process, someone else assumes your existing leasing contract, along with your rights and obligations as the lessee. Through this transfer, you, as the original lessee, can exit the contract without having to bear substantial financial losses.

The Advantages of a Lease Takeover

By transferring the lease to someone else, you free yourself from all future obligations under the leasing contract. The leasing bank is pleased to avoid a payment default and the associated effort. As the new lessee, you benefit from a shortened lease term and commit for a much shorter period than in regular leasing. This is advantageous if your life changes rapidly, for example, due to work-related stays abroad. Also, if you generally avoid long-term commitments whose impact on the future is uncertain, a shortened lease term suits you better.

Another advantage lies in the amount of the leasing rate: it is calculated based on the purchase price, spread over the lease term (plus interest). The shorter the leasing contract, the higher the monthly rate. With a lease takeover, you pay the rate of the existing contract, which originally had a longer duration.

What Does a Lease Takeover Cost? – An Example

In addition to varying conditions and rate levels from contract to contract, there are additional costs involved in a lease takeover.

• The original lessee must apply for the lease takeover at the leasing bank. If the bank agrees, the administrative fee for the process ranges from 200 to 600 CHF.

• To exclude hidden defects in the vehicle, it should be professionally inspected. Any damages to the car must be professionally repaired before returning it to the lessor. You don't want to be held responsible for damages caused by someone else in the acquired contract. The fees for the condition report by the inspector amount to approximately 200 CHF.

• Fee for vehicle registration transfer.

The parties involved should negotiate in advance who will bear the associated fees: the previous lessee, the new lessee, or both proportionally.

As the new lessee, you will, of course, continue to pay the agreed monthly installments. However, there is one more thing to clarify during the takeover process: lessees often make an initial down payment to lower the monthly rate. With a lease takeover, you usually need to cover a portion of this down payment.

In addition to the monthly rate, the leasing contract specifies the allowed mileage. If the previous lessee exceeded these mileage limits, additional charges apply, which they would need to cover. Before taking over the contract, verify if this is the case to avoid being responsible for the previous lessee's excess mileage.

If the inspector identifies any defects in the car, you can request the previous lessee to cover the repair costs.

How Does the Lease Takeover Process Work?

As a basic requirement, the lessor must agree to the lease takeover. Usually, lessees receive approval if the new contracting party has a good credit rating and is in indefinite or long-term employment. By the way, you can also acquire commercial vehicles through a lease takeover. However, the requirement is that the business has been operating for at least 6 months, and your business analysis (BWA) submitted to the leasing bank demonstrates a positive financial situation.

Before the transfer, you need to clarify with the previous lessee:

• Who will cover the bank and inspector fees,

• If you need to make a proportional down payment,

• If the previous lessee exceeded the agreed-upon mileage,

• If the vehicle has any damages caused by the previous lessee.

Next, you agree on a date for the vehicle inspection, preferably with the inspector present. The lease takeover contract should include the conditions for a potential residual value leasing (where you acquire the vehicle at the residual value after the lease period) or the right of first refusal. The latter refers to the lessee's obligation to buy the vehicle at a price set by the leasing company if the lessor wishes to sell it.

What are the Best Lease Portals?

If you want to organize the lease takeover privately, you will need to find interested parties first. The procedure can be quite complicated for laypersons. In Switzerland, leasing portals not only help you lease your dream car, but they also assist you in carrying out a lease takeover or entering an existing leasing contract. Portals such as Leasetransfer or Leasingplatz in Switzerland specialize in lease takeovers. There you will find a wide range of options and can filter according to your preferences.

Conclusion

Lease takeovers are the ideal solution if you don't want to commit for years. You get the perfect combination of a short lease term and low rates. Despite being a genuine win-win situation for all parties involved, there are also disadvantages to a private lease takeover or one through a portal. You cannot freely choose the color and features of the car; instead, you must adopt the configuration of the previous owner. The same applies to the agreed-upon mileage: if you, as the new lessee, drive significantly more or less than the agreed monthly mileage, you will face additional costs. There is a risk of hidden defects that the previous owner is responsible for. These considerations apply regardless of whether the vehicle involved is a BMW, Volvo, Skoda, etc.

As an alternative to a lease takeover, consider a car subscription. At CARIFY, you can get a vehicle with a minimum term of one month, but you can also take advantage of favorable conditions for a long-term subscription over 48 months if you wish. After the contract period ends, you can cancel within one month. With us, you'll quickly and easily find a vast selection of vehicles in many attractive colors and configurations that leave little to be desired. With us, you are also on the safe side regarding damages and mileage, and you only pay for what you use. Additionally, you can tailor the included mileage exactly to your driving needs. With our all-inclusive package, you have full cost transparency as there are no additional costs for taxes, insurance, and maintenance: everything is included! With a car subscription, you stay flexible and don't have to worry about a lease takeover – that's "Cars made easy."