Blog Lease Takeovers And How They Work In Ontario

May 2, 2022

Here’s how to get out of a car lease early in Ontario

woman shopping at car dealership with salesman

What happens if you want to end the contract for your lease early? One of the options you can consider is a lease takeover.

Recently, leasing has become a preferred option for drivers. As of 2018, around 70% of Canadians choose a lease. Cars are typically leased for a minimum of two years. Some agreements can be for 5 years or more.

When you are choosing to lease or finance a vehicle, a lease takeover is a good option to get a new vehicle at a lower monthly price or for the short term.

Here we’ll discuss what a lease takeover is, its advantages, and disadvantages, and answer common questions.

What is a lease takeover?

A lease takeover involves the transfer of a lease from the original buyer to another person. The new person takes over the current contract and vehicle for the remaining term. This typically happens when the lease seller wants to get out of their contract early.

People who are currently leasing a vehicle may consider a transfer because of changing family situations or other financial obligations. A transfer can also be cheaper than returning a vehicle while still in the agreement.

Lease transfers allow the driver to have a newer vehicle without a loan, and it saves the fees associated with breaking the contract early.

How does a lease takeover work?

A lease takeover requires that you find a friend, family member or individual who might be interested in the vehicle. You can post an ad in a newspaper or online seeking out someone to take it over.

Once you find someone to take over the lease, you will need to connect them to the finance company that holds the lease. They will run a credit check to make sure the person can responsibly take it over. Paperwork is signed and transferred, and the new owner will set up new plates.

When it is transferred to someone else, you will no longer need to worry about monthly payments associated with the vehicle – the person who took over will be making payments for the duration of the original agreement. They will be responsible for returning the vehicle in satisfactory condition and within the set number of kilometres.

For example, let’s say you had a 5 year vehicle lease. Your monthly payments were $500. You have 24 months left on your contract. When you find someone to take over, they will get your vehicle, and take on the $500 monthly payments for the remaining 24 months.

If you are considering a transfer, speak with your dealer or financial agency to learn about options and associated fees.

Pros And Cons To A Lease Transfer

It is important to understand the terms of the original lease. There might be limitations to a lease transfer and financial options. Here are the pros and cons of a lease takeover.

  • Lower monthly payments : When a vehicle is being leased, the owner is paying only for the depreciation.
  • No down payment : Takeovers will not require a down payment which can ease the start-up cost of having a vehicle.
  • Vehicle maintenance : Leased vehicles tend to be better maintained and have lower kilometres than buying a used vehicle.
  • Short-term commitment : Some drivers like to switch their vehicles often for short-term leases.
  • Incentives : If the seller is keen to get out of their contract early, they may offer incentives to the new driver.
  • Transfer and turn-in fees : In the contract there will be costs for turn-in and transfer fees. Taxes can also increase the amount needed to transfer.
  • Kilometre limits : Make sure the vehicle has less mileage on it than the yearly limit. As a buyer, you want to ensure there are enough kilometres left on the car until the end of the term and your average kilometres will be under the limit.
  • Wear and tear : Vehicles with extensive wear and tear should be avoided, as the new buyer will need to pay for repairs. Body damage over two inches, bad colour matches, scratches, ad bumper damage are usually charged.
  • Hidden repairs : Undetected problems or mechanical issues can be costly. Before you move forward with anything, get the vehicle inspected by a reliable mechanic.
two people shaking hands infront of a car

What are the risks of taking over a lease?

Taking over a lease transfer can save you money. You need to find the right vehicle with the right terms. You also need to fully understand the risks and fees of taking over a lease :

Transfer fee

Many contracts will have a fee to transfer the vehicle to another driver. This fee can range between $300 to $800. The good news is that most people looking to get rid of a lease will take on this cost.

Monthly payment

When you do a transfer, you inherit the monthly payment as is. You cannot negotiate a change to the payments.

Limited mileage

Always check the number of kilometres on the vehicle and how many are left as per the original agreement. If you go over the kilometre limit, you will be required to pay for any additional kilometres used. Depending on the agreement, it can cost 10 cents to 25 cents or more per kilometre.

Repairs and wear and tear

Ideally, if you are taking over a leased vehicle it should be in immaculate condition. If a vehicle needs repairs, has been in an accident, or has interior faults, you are responsible for fixing any excessive wear and tear. Always ask for a service record and vehicle history report. You are the one responsible for returning the vehicle at the end of the term.

Where can I find a vehicle lease takeover?

A lease takeover can be taken care of at a car dealership or with a lease takeover company such as or There are also a number of other websites online, such as Kijiji and Facebook Marketplace, where you can find people looking to find someone to takeover.

Lease Takeover FAQs

The decision to move forward with a lease takeover does not affect your Ontario auto insurance. When thinking about taking over one, you need to consider the vehicle model, its features, model year and safety rating will impact the amount you pay.

A lease takeover in Canada can cost between $300 and $500. The cost and terms will be outlined in the original agreement.

Yes, but ending a lease agreement early can be expensive. If you are looking to end one, you can consider a lease takeover, buying out the vehicle or looking into another lease. All these options come with various fees – make sure you do your research and fully understand your agreement.

A leased vehicle can cause challenges for some drivers when faced with changes in finances and family situations. Setting up a transfer can save the owner's fees of selling the car back to a dealership or buying out the car. For someone looking to have a vehicle short-term, taking over a lease can be a successful, cost-effective solution.

Understand how to get out of a lease and the costs involved

You can roll your current costs into a new one or buy it out, or you can consider a lease takeover. From a seller's perspective, a takeover is an effective option to get out of a current agreement and free up finances. Weigh your options, compare auto insurance quotes and make sure this option is the right decision for you before moving forward.