Because of work, I need to move out of the country. I leased a Honda Accord this January, and now I must turn in the car early. The manager at the dealer where I leased the car is a friend, and she said she has a friend who needs to lease the car so she can take over the lease for me. However, I must remain the owner of the lease and car with the DMV, and the lady will purchase insurance (300k/100k) and pay the payments. If I accept this deal, I will save over $2000 (the money I have to pay if I return the car back to Honda).
My questions are:
1) What sort of risks am I looking at if I do let her "take over the lease"?
2) Is this recommended?
3) What should I be aware of if I do take the deal?
Thanks to all for answering in advance!
2007-11-30 21:04:43 · 8 answers · asked by Anonymous in Cars & Transportation ➔ Insurance & Registration
If this person is taking over your payments of your lease, if she stops paying, the car will be repossessed & a mark on your credit not hers. If she carries the insurance, it probably won't be acceptable to the lease because it is not in your name & they can repossess or force place coverage based on that. The forced placed coverage covers the leasing company ONLY, no one else, not you, not her. Her insurance will not cover the car because her name is not on the lease (she has no insurable interest) so in essence the car is uninsured and if she has an accident, you will be responsible to pay for all damages including property damage & bodily injury. Even if her policy pays, it will not defend you & you would have to hire your own attorney to defend you if the accident goes to suit. If you buy insurance for the vehicle & they find out you are not in possession of the vehicle & she is "renting" it from you - she is taking over your payments so you are receiving monetary benefit from her - your policy will be null & void. You may be able to get coverage on a commercial policy for this situation, maybe not.
This is a bad situation & could cost you WAY more than the $2,000 you are saving by not turning it in early. If I were you, I would turn it in early (& be sure that it is noted in the correct way on your credit report - that it was done because you no longer need a car, not because you can't afford to keep it) and pay the $2,000 early lease termination fee.
Also, why is she not leasing or buying a car on her own? Does she have a bad credit rating & can't get a lease?? This is also something you need to consider.
2007-12-01 01:39:22 · answer #1 · answered by Sue 6 · 0⤊ 0⤋
If you are still the lease holder - what happens to your credit if the person who takes over the lease does not make the payment? Does that hurt your credit?
My guess is that it would. I don't know anything about leases - but if you are the one legally responsible for the lease - it seems to you would be the only legally responsible for the payment and the one whose credit would take a big hit if the lady stops paying. What incentive would the lady have to make the payments on time if you are the one penalized and not her? If that's the case - I'd pay the 2000 and turn the car in. I would not put my credit rating into the hands of a stranger or even the hands of a friend/family member.
What happens if the person who takes over the lease stops paying for her car insurance? How does that affect you?
2007-12-01 00:24:20 · answer #2 · answered by Boots 7 · 0⤊ 0⤋
Things like this you have to ask yourself What is the Worst Scenario. especially since you do not know the person.
Remember.. you are farrrrrrrrr away when:
1) She stops paying YOUR lease... you will still owe the money
2) She has an accident. Even with insurance YOU will be sued if the settlement is not enough. (300k is not a whole lot if a couple of deaths occur). What if she just lets the insurance lapse.. remember you are there and she (and the car are here).
3) What if she really beats the car up and there is an assessment charge for damage when it is turned in?
Bottom line.. these are pretty high risks to take to save $2k.
Do you have an option to buy the car. ? If so, would buying it and selling it allow you to mitigate the $2,000 loss?
you will have to decide... but thats my 2 cents...
good luck either way... and enjoy your new home.
.
2007-12-01 02:49:05 · answer #3 · answered by ca_surveyor 7 · 0⤊ 0⤋
If your friend stops paying the lease, you will be held responsible for it because the lease is still under your name. Thus, you will experience all the bad credit that you don't want to in the first place. Unless you can really trust the person you are transferring the lease to, you are better off continuing with your lease. Also, if your friend is involved in an accident, you will most likely end up paying for it. Worst case, you might even get sued for it. Other insurances might also be affected, like if the car goes through all sorts of damages. Make sure that you have a word with your car leasing company first before doing anything radical. They will be able to advise you.
Hope this helps!
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2007-12-02 18:16:57 · answer #4 · answered by Anonymous · 0⤊ 0⤋
The other party assumes responsibility for continuing to make monthly payments, although many car lease companies still hold the original lessee responsible if the new lessee fails to make payments. Some car lease companies do not allow lease transfers.
Although there are some modest fees and service costs involved with this process, it avoids the high cost of early lease termination.
If the other person has an accident you are still the owner and can be sued for any and all damages and or deaths.
I would not do this because you are leaving yourself opened on the liability part.
2007-12-01 00:21:50 · answer #5 · answered by Anonymous · 0⤊ 0⤋
1. Well, you're still RESPONSIBLE for the car, the payments, damages, wear and tear, etc. What if she doesn't pay you? Well, you're still on the hook for your payments. AND, you could have a really hard time getting the car back from her. IT wasnt' stolen - you gave it to her. What if she won't turn it in at the end of the lease? Now YOU are on the hook for that! What if she lets the insurance lapse, and totals the car? YOU ARE SCR*WED. What if she kills someone in the car? You're the leasee - you're on the hook for it. It's a BAD IDEA. THe reason she can't take over as owner of the lease, is she's a BAD RISK. If she's to crappy a risk for the dealer to take her on, you think you're going to do better? RUN AWAY. This is not a deal.
2. No
3. What to be aware of - you're going to regret it. It's going to cost you a lot of money. Trust me.
2007-12-01 15:11:15 · answer #6 · answered by Anonymous 7 · 0⤊ 0⤋
Yeah it is a good idea. the risks depend on the contract so you should have that looked over by a lawyer. Otherwise you can benefit from assuming a lease.
2016-05-27 02:07:49 · answer #7 · answered by ? 3 · 0⤊ 0⤋
Don't do it. If you remain the owner of the lease you are responsible for everything about the car from a ticket to a wreck. Not to mention charges for any over mileage, and insurance.
Only if it goes out of your name would this be acceptable.
2007-12-01 03:24:37 · answer #8 · answered by oklatom 7 · 0⤊ 0⤋