How to Sell a Lease: The Step-by-Step Transfer Process

A lease transfer, or “selling a lease,” moves an existing lease agreement from one party to another. This process allows the original lessee to exit financial obligations before the lease term concludes, by finding a new individual to assume remaining payments and responsibilities. This discussion focuses primarily on vehicle leases, as they are the most common type of lease individuals seek to transfer. Successfully navigating this process requires understanding specific procedures and financial implications for both parties.

Evaluating Lease Transfer Options

Before initiating a lease transfer, review the original lease agreement. This document contains specific clauses related to assignment or transfer, outlining any restrictions or requirements imposed by the leasing company. Some agreements may prohibit transfers, while others allow them under certain conditions.

Contact the leasing company directly to understand their specific policies and procedures for lease transfers. Each lessor maintains unique rules regarding eligibility, including minimum remaining lease terms or mileage limitations. Confirming these policies early ensures the lease is transferable.

Assess the leased asset’s condition. For vehicles, note the current odometer reading, compare it to mileage limits, and evaluate the car’s physical state. This helps determine if the lease is an attractive opportunity for a prospective transferee.

Preparing for Lease Transfer

Once a lease transfer’s feasibility is confirmed, gather comprehensive information about the existing lease. This includes the original lease contract, account number, current monthly payment details, original lease term, and exact end date.

For vehicle leases, record the current odometer reading and compile maintenance records. Ensuring the vehicle is clean and addressing minor cosmetic issues enhances its appeal to potential transferees.

Contact the lessor to request a complete list of all forms and documents required for the transfer application. This includes a dedicated lease transfer application form, a credit application for the prospective new lessee, and identity verification documents. Understanding these requirements streamlines the formal application process.

Obtain a current payoff quote from the lessor. This quote indicates the financial liability associated with buying out the lease, providing a benchmark for evaluating the transfer’s financial landscape. While not directly used in a transfer, it offers context regarding the vehicle’s value relative to remaining lease obligations.

Executing the Lease Transfer

With preparatory steps complete, find a suitable transferee. Online marketplaces specializing in lease transfers, such as Swapalease or LeaseTrader, connect current lessees with interested individuals. These platforms facilitate initial screening of potential candidates.

Upon identifying a prospective transferee, the formal application process with the lessor begins. The new lessee undergoes a credit application and approval process, as the leasing company verifies their creditworthiness and financial capacity to assume remaining payments. A strong credit score, in the range of 650 to 700 or higher, is required for approval.

Once the new lessee is approved, all parties sign the official transfer documents. This legally transfers lease obligations from the original lessee to the new party. Depending on the jurisdiction, this may involve updating vehicle registration records with the Department of Motor Vehicles to reflect the change in the responsible party.

The final action involves the physical handover of the leased asset. Transfer possession of the vehicle, along with all associated keys, manuals, and relevant documentation, to the new lessee. This marks the transfer’s completion, with the new lessee fully responsible for the vehicle and its remaining lease terms.

Financial Considerations of Lease Transfer

Lease transfers involve a transfer fee charged by the leasing company to cover administrative costs and credit checks. These fees range between $50 and $625, and can be paid by the original lessee, the new lessee, or shared between them, depending on negotiation.

Understand the continuing liability of the original lessee. While an assignment aims to transfer all rights and obligations, some lease agreements may stipulate that the original lessee retains a contingent liability if the new lessee defaults on payments. Clarify if the lessor provides a full release of liability for the original lessee upon transfer.

The handling of the security deposit requires attention. The original security deposit may be transferred to the new lessee, returned to the original lessee, or applied by the lessor to any outstanding charges. The original lessee may collect the security deposit directly from the new lessee as part of their private arrangement.

Pro-rated payments for the month of transfer must be calculated and settled between the original and new lessees. This ensures each party is responsible for lease payments only for the days they had possession of the asset. Clear communication prevents future disputes.

Negotiated incentives can facilitate a transfer. Such incentives might include the original lessee offering a cash payment to the new lessee to cover a portion of the transfer fee, or even a few initial monthly payments. These financial adjustments are determined through direct negotiation between the parties.