What is a short term lease?

Jan24
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Short term auto leasing is not a new type of leasing in the marketplace, but it is a type of leasing that is growing in popularity. If you’re considering leasing, and you’re the committment phobia type, and like to put more of your hard earned dollars back into your pocket, then a short term lease may perfect for you.

short term lease is basically any auto lease that has a term less than 24 months. While this is not the definitive definition of a short term lease, it does give you the idea of what this type of lease.

A short term lease can occur when a lessee who is looking to get out of a lease and makes their car available for a lease takeover, transfers the lease to another individual who assumes the lease agreement for the remainder of the lease term.

This process is known as a lease transfer, or lease takeover, which we’ll get into later. The option of a lease transfer is a popular means for individuals to end a lease agreement early, where both parties (Lease Seller and Lease Buyer) win. There are services online where you can browse a list of leases for transfer posted by individuals seeking to end a lease early. Though a primary benefit arising out of assuming someone elses lease is to take over the lease for a shorter period of time the full lease term, thus known as a short-term lease.

Short term auto leases hold a number of advantages. One such advantage of a short term lease is the individual taking over the lease and into a short term lease may assume the lease without placing any down payment.

The down payment is placed by the original lessor. Therefore, if the original lessor decides to get out of their lease early and find someone to transfer the lease to who assumes the lease as a short term lease, they would in fact benefit from less monthly lease payments due to the size of the down payment the original person placed at the beginning of the lease term.

Another benefit of a short term car lease is the individual can save money on the insurance for the vehicle as it has already been covered by the original lessee. However, if any damage were to occur to the vehicle during the lease assumption period, the new lessee would be responsible to cover the costs.

The economics of a short term lease look very attractive. An individual who gets into a short term lease can save upwards of 30-60%. More people today, especially in tough economic times, discover that a short term car leasing offers great bargains.

Open up a newspaper and you’ll likely not find any short term leases in the auto section. However, turn to the web, and you’ll find companies like AutoLeaseBreakers.com that specialize in short term leasing, via lease transfers. These companies will match up people seeking to end a lease early through a lease transfer, with people seeking to take over a lease via lease transfer. This is process is known by many terms other than short-term leasing, such as lease transfers, trade a lease, swap a lease, etc. No matter what you call it, the concept is still the same and the end goal is a short term lease.

Why get into a short term lease?

  • save money on no deposit down payment
  • save money on insurance
  • less monthly lease payments than if you leased new
  • possibly obtain a cash-incentive to take over a lease by individual needing to get out of the lease
  • less time comitted than a new lease, typically 24 or less months
  • allows to get into a more luxury vehicle than leasing new

Its a good bet that you’ll find some great bargains on a short term lease by going through a professional company that specializes in short term leasing, lease assumptions, or lease transfers.

Learn more about auto leasing, what dealers don’t want you to know and much more in leasing 201 section.

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