Leasing takeover: What the old and new lessee need to consider

You found your dream car – a compact car, ideal for the city. The 4-year leasing offer came just at the right time, and you took the chance. But now your life has changed: After a family addition, your car has become too small, or you no longer need a car after relocating. Now you are surely wondering how to get out of your leasing contract without incurring high costs.

In this blog post, we explain how a leasing takeover can help you out of this situation. On the other hand, there is the interested party for taking over the contract. You will also learn about the advantages and disadvantages for the new interested party and what needs to be considered in this guide.

What exactly is a leasing takeover?

With a leasing takeover, a new person takes over your existing leasing contract, with all rights and obligations. He or she can use the vehicle for the remainder of the contract by paying the remaining monthly instalments to the leasing bank. You get out of the contract without any financial loss, while the new lessee is not tied in for as long as with a regular lease thanks to the shorter contract term.

What are the reasons for a leasing takeover?

A lease take-over can be offered for a number of reasons. In most cases, the reasons for early lease termination are personal in nature. These may include:

• Career change or relocation

• Family expansion or changed space requirements

• Financial constraints

• Dissatisfaction with the current vehicle

What are the requirements for taking over a leasing contract?

Regardless of the reason for taking over a lease, you are now faced with the problem of finding a suitable lessee to take over your lease. Or perhaps you are the one interested in taking over the lease? Either way, there are a number of requirements that need to be met before the new lessee can go ahead.

Firstly, the lessor must agree in principle to the takeover. In addition, the new lessee must fulfil the leasing requirements in Switzerland. This includes, among other things, a clean extract from the debt collection register. Additional proof of income or assets may also be required.

How exactly does the leasing takeover work?

Once a suitable lessee has been found, the current contract holder informs the leasing bank about a possible leasing takeover. If the leasing bank accepts the contract takeover, the lease will be transferred to the new lessee. Prior to the transfer, the following aspects in particular need to be clarified

• What is the monthly leasing instalment?

• Does the new lessee have to take over part of the down payment?

• How many kilometres are left?

• What damage is there to the vehicle at the time of transfer??

• Is there a put option requiring the new lessee to purchase the vehicle at the end of the lease?

• Which of the two parties will bear the costs for the valuer, the transfer of the contract and the re-registration of the vehicle?

Once the new and old lessees have agreed on the formalities, a joint viewing should be arranged, preferably directly with a valuer. Once both parties are in agreement, the contract can be signed and the vehicle re-registered.

Leasing takeover costs - compact summary

The cost of taking over a lease is made up of several one-off costs. Firstly, the old lessee must ask the leasing bank to take over the contract. If the bank agrees, a few hundred francs will be charged for administrative costs.

If an expert is hired to inspect the vehicle for damage, he will need to be paid for his services, including the preparation of a condition report. You can expect to pay several hundred francs for this.

Finally, there is a fee for re-registering the vehicle. In Switzerland, the costs of changing vehicles or owners vary from canton to canton. Issuing a vehicle registration document costs around 30 to 40 francs, while a new number plate costs around 20 to 60 francs.

What are the advantages and disadvantages of taking over a lease?

Advantages of a lease takeover - old and new lessee

Taking over a leasing contract has a number of advantages for both the old and the new lessee. As the previous lessee, you can respond to changes in your circumstances by terminating the lease. This means you don't have to keep paying for a car you no longer need and avoid getting into financial difficulties.

For the new lessee, on the other hand, the benefits can be as follows:

• Shorter contract term: Compared to a new lease, the new lessee has a shorter contract period and is therefore not tied in for the long term.

• Good negotiating position: Since the current lessee wants to move on quickly, you may be able to negotiate more favourable terms when taking over the contract.

• Possibly lower leasing instalments: If you are taking out a new lease, the payment will be based on the purchase price (plus interest). It will therefore be relatively high for a short term. On the other hand, if you take over a leasing contract, you will pay the same rate for the shorter term as for the original longer term.

• Loss of the down payment: the down payment is non-refundable in the event of a lease transfer. The new lessee will also be reluctant to take over part of the down payment, which is why you must expect a (partial) loss of the down payment.

• Consent of the lessor: Taking over a lease requires the consent of the leasing company. If they do not agree, you cannot transfer the contract.

• Find a successor: Finding a suitable successor who is willing to take over the lease can be time-consuming and tedious. Especially if you want to get out of the contract quickly.

• Inheriting existing contract terms: As a new lessee, you will have to take over the vehicle and the contract in exactly the same way as the previous lessee, without being able to make any changes to the colour, equipment or engine.

• Liability for previous damage: As a new lessee, you also accept the previous damage and defects of the vehicle. If you do not notice these before taking over the vehicle, you will have to pay for these damages when returning the vehicle.

• Kilometre limit: The kilometre limit in the original contract remains in force for you as the new contract holder and cannot be changed. Exceeding the limit often results in high kilometre charges.

Conclusion concerning a lease takeover

From the perspective of the old lessee, a lease takeover is initially unfortunate. After all, you didn't expect to end your lease prematurely. However, a lease buyout can ensure that you don't waste time and money on a car.

On the other hand, if you're looking for a new car, you should consider the following. If you can negotiate an attractive price, a lease buyout may make sense. However, you may have to pay for damage to the car that you weren't aware of when you signed the contract, you won't have the freedom to customise the car and you'll have to stick to the agreed term and mileage limit. You should also be aware of the terms and conditions of leasing in general. When you consider the total cost, including insurance, service & maintenance, registration, taxes and tyre changes, the seemingly low leasing rate is significantly higher than it appears at first glance.

However, if you are looking for a flexible and transparent alternative without the disadvantages of leasing, you may be better off with a car subscription.

Carvolution car subscription - the leasing alternative

Would you like to get out of your leasing contract early and are looking for a new lessee? If you don't want to run the risk of having to give up your car prematurely, the car subscription is the ideal solution thanks to its shorter terms. With Carvolution's all-in-one subscription, you always drive a car in mint condition and can choose between terms of 3 to 48 months.

However, if you want to take out a leasing contract, you should carefully consider the additional costs and risks involved. A car subscription with a short contract period is also a good solution for you. You won't have to pay for the damage caused by your predecessor and the fixed monthly price already includes all costs such as insurance, tyres, service and maintenance, as well as taxes and cantonal redemption.

Thanks to the Best Price Guarantee, you can also definitely save money compared to leasing with the individual cost comparison. If you are interested, do not hesitate to contact the Carvolution team for a non-binding consultation.