How Car Swap Leases Work (2024)

Katie Powers
Written byKatie Powers
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Katie PowersAuto and Life Insurance Editor
  • Licensed auto and home insurance agent

  • 3+ years experience in insurance and personal finance editing

Katie uses her knowledge and expertise as a licensed property and casualty agent in Massachusetts to help readers understand the complexities of insurance shopping.

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Jackie Cohen
Edited byJackie Cohen
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Jackie CohenEditorial Manager

Jackie Cohen is an editorial manager at Insurify specializing in property & casualty insurance educational content. She has years of experience analyzing insurance trends and helping consumers better understand their insurance coverage to make informed decisions about their finances.

Jackie's work has been cited in USA Today, The Balance, and The Washington Times.

Konstantin Halachev
Data reviewed byKonstantin Halachev
Headshot of Konstantin Halachev, VP of Engineering at Insurify
Konstantin HalachevVice President of Engineering
  • 7+ years experience in data analysis

  • Ph.D. in Computational Biology

Konstantin has led data teams across multiple industries, including insurance, travel, and biology. He’s led Insurify’s engineering team for more than three years.

Updated June 15, 2022 at 12:00 PM PDT

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Aside from traditional methods of buying or leasing a new or used car, drivers can participate in a car lease swap. Also known as a car lease transfer, it allows a driver to take over an existing lease from a leased car’s original lessee. This provides a cost-effective option for individuals who need to terminate their car lease early or can only take on a short-term lease agreement.

No matter where you find yourself in your new car leasing or buying journey, Insurify provides users with a convenient car insurance quote comparison tool to compare dozens of top auto insurance providers. Monthly and yearly car insurance premiums can quickly add up, which makes it important to find an insurer meeting your specific insurance needs at a cheap price.

Best Car Insurance Companies

Best Car Insurance Companies

Quick Facts
  • Auto insurance providers calculate rates based on a person’s driving profile and more.

  • Car lease swaps refer to the transfer of an existing car lease from one person to another.

  • Car insurance rates typically increase after an accident or violation.

Why would you want to sell in a car lease swap?

What is a car swap lease?

Car swap leases or transfers allow you to transfer allow leases to be transferred to a new driver before the lease is complete.

Terminating an auto lease prior to its completion can be costly and tedious for the individual responsible for termination. Early termination fees and penalties make ending a lease early extremely undesirable. Drivers can find themselves in mundane and dramatic situations that make them want to terminate a lease early.

Such situations include families having a new baby and requiring more room and baby-friendly seating, a life change, and a job layoff that makes lease payments less feasible to pay. Less stressful situations include a person realizing the car simply does not meet their needs partway through the lease or an indecisive driver who likes to frequently change the type of car they drive.

Why would you want to buy in a car lease swap?

Buyers in car lease swap scenarios have a number of appealing benefits in the situation. First, car lease swaps typically happen around the middle period of the lease, allowing the buyer to take on a shorter-than-usual lease for a vehicle they are considering purchasing in the future or a car they do not want to commit to driving for the more typical two- or four-year car lease.

Additionally, buyers often have the upper hand in the car lease swap transaction because those looking to sell their lease may be a tad desperate to complete the swap, opening up chances for cash incentives and more. Third, the buyer does not pay a down payment in a car swap lease. Buyers often pay transfer fees, but the cost is significantly smaller than a usual down payment.

Lastly, some buyers find themselves paying smaller lease payments than they would theoretically pay if they took out an entirely new lease. If the original leaseholder traded in another vehicle at the time of the lease or paid a large down payment, payments for the new lessee may be even less costly. Overall, buyers can save in car lease assumption scenarios.

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What You Need to Know Before You Complete a Car Lease Swap

Before you participate in a car lease takeover, you should know that not all car leases can be swapped, for a few reasons related to the financing companies that handle car leases for various major car manufacturers. Furthermore, different rules regarding lease purchasing specifics vary by each financing company. The list below discusses variations in rules dictating how and when:

  • In some cases, specific financing leasing companies do not allow car lease swaps, with the exception of specific, outlined circumstances like military deployment.

  • Some of these companies only allow car lease swaps under specific, predetermined scenarios. A policy that dictates an original leaseholder must have the car for a certain amount of the lease prior to conducting a car lease swap.

  • Other companies allow a limit transfer, in which the original leaseholder of the vehicle remains on the lease with some element of liability for the vehicle.

  • Lastly, some of these companies allow for a full lease swap, in which the vehicle and lease responsibility now fall under the new buyer.

General Car Lease Swap Advice to Know Prior to the Transaction

If you are considering buying or selling a lease in a car lease swap, be sure to research the specific transfer restrictions, transfer fees, required credit checks, and policies from the financing company you will be dealing with throughout the process. Dealing with these hurdles is doable, but knowing about them beforehand makes the process easier for everyone involved.

Cheap Car Insurance

Cheap Car Insurance

Important Lease Swap Considerations for Potential Buyers

Buyers taking on a lease from someone in a car lease swap should check on specific details about the car and the lease. Understanding both the allotted mileage limits on the car lease and the miles already driven by the original leaseholder is crucial. Buyers should consider their own driving habits to estimate if they will have to pay fees for exceeding the lease’s mileage cap.

Additionally, checking the vehicle for visible damage prior to committing to a lease swap prevents the new leaseholder from being on the hook financially for penalties associated with vehicle damage from the original leaseholder. Some buyers pay mechanics to check the vehicle for them. Buyers should also make sure the seller has been completing regular maintenance.

For buyers considering purchasing the vehicle at the end of the lease period, sizing up the car’s current value and condition provides extra information. Lastly, combing through the lease to understand any penalties and limitations prevents any surprises later on in the process or after its completion.

How to Do a Car Lease Swap

A few options exist for drivers interested in completing a car lease swap. Drivers can check within their personal networks of friends and family or local groups on platforms like Craigslist or Facebook Marketplace to put feelers out and find an applicable lease buyer or seller. There are websites that help facilitate the process for an initial or monthly fee.

Once the buyer and seller find each other, the seller contacts the financing company, which then completes a credit score check on the buyer. From there, the buyer, seller, and financing company complete the necessary lease transfer paperwork—during which the buyer must visit a local DMV office to formalize the transfer, vehicle registration, and any other state requirements.

When is the seller no longer needed in the process?

When a full transfer is allowed by the lease’s financing company, the seller no longer has any responsibility for the vehicle or the vehicle lease after the transfer. With financing companies that require a seller to stay on the lease with some liability, the original leaseholder likely wants to keep an eye on the new leaseholder’s payments and overall driving habits.

Best and Worst Sites to Compare Car Insurance

Best and Worst Sites to Compare Car Insurance

How to Find Affordable Car Insurance

For drivers leasing or buying a car, affordable auto insurance is a must. The most effective way to find the best rates for specialized coverage is to regularly shop around for rates from the top national and regional auto insurance providers. With Insurify’s comprehensive car insurance quote comparison tool, users easily compare monthly quotes from the comfort of their home.

Frequently Asked Questions

  • What is a car lease swap?

    A car lease swap takes place when someone transfers their vehicle lease to another individual. Specific policies vary based on each lease financing company, but car lease swaps either refer to a full transfer of the vehicle lease or require the original leaseholder to remain on the lease with the new leaseholder. People complete car lease swaps for a number of reasons.

  • Why might buyers want to engage in a car swap lease?

    The buyer in a car swap lease deal often benefits from the seller needing them to take on the leased vehicle. Additionally, buyers who may purchase the car in the future or who need a short-term lease benefit from a partial lease, which otherwise may span two to four years. Some buyers pay less on monthly payments if the original lessee paid a large down payment up front.

  • Why might sellers want to engage in a car swap lease?

    Sellers engaging in a car swap lease avoid termination fees associated with ending a lease period early, which can become costly. They may need to sell their lease due to military deployment, having a baby, going through life changes that make payments harder to complete, or simply no longer wanting to drive the specific car. A swap appeals to many in these cases.

  • How can I find cheap car insurance?

    No one-size-fits-all car insurance policy exists, which makes shopping around for insurance at various regional and national insurance providers important for successfully finding specialized rates at an affordable price. With Insurify, individuals shopping for insurance can easily compare monthly quotes with the car insurance quote comparison tool without hassle or confusion.

Compare Car Insurance Quotes Instantly

Secure. Free. Easy-to-use.
Based on 3,806+ reviews
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Methodology

Insurify data scientists analyzed more than 90 million quotes served to car insurance applicants in Insurify’s proprietary database to calculate the premium averages displayed on this page. These premiums are real quotes that come directly from Insurify’s 50+ partner insurance companies in all 50 states and Washington, D.C. Quote averages represent the median price for a quote across the given coverage level, driver subset, and geographic area.

Unless otherwise specified, quoted rates reflect the average cost for drivers between 20 and 70 years old with a clean driving record and average or better credit (a credit score of 600 or higher).

Liability-only premium averages correspond to policies with the following coverage limits:

  • Bodily injury limits between state-minimum rates and $50,000 per person, $100,000 per accident
  • Property damage limits between $10,000 and $50,000
  • No additional coverage
Full-coverage premium averages correspond to the same bodily injury and property damage limits in addition to:
  • Comprehensive coverage with a $1,000 deductible
  • Collision coverage with a $1,000 deductible

Quotes for Allstate, Farmers, GEICO, State Farm, and USAA are estimates based on Quadrant Information Services’ database of auto insurance rates.

Katie Powers
Katie PowersAuto and Life Insurance Editor

Katie Powers is an insurance writer at Insurify with a producer’s license for property and casualty insurance in Massachusetts and expertise in personal finance and auto insurance topics. She strives to help consumers make better financial decisions. Prior to joining Insurify, she completed her undergraduate and graduate degrees at Emerson College. Her work has been published in St. Louis Magazine, the Boston Globe, and elsewhere. Connect with Katie on LinkedIn.

Jackie Cohen
Edited byJackie CohenEditorial Manager
Photo of an Insurify author
Jackie CohenEditorial Manager

Jackie Cohen is an editorial manager at Insurify specializing in property & casualty insurance educational content. She has years of experience analyzing insurance trends and helping consumers better understand their insurance coverage to make informed decisions about their finances.

Jackie's work has been cited in USA Today, The Balance, and The Washington Times.

Konstantin Halachev
Data reviewed byKonstantin HalachevVice President of Engineering
Headshot of Konstantin Halachev, VP of Engineering at Insurify
Konstantin HalachevVice President of Engineering
  • 7+ years experience in data analysis

  • Ph.D. in Computational Biology

Konstantin has led data teams across multiple industries, including insurance, travel, and biology. He’s led Insurify’s engineering team for more than three years.