When looking to assume a lease, look for:
1. A large downpayment. This is a "sunk cost" to the original leasee and if you take over the lease without inputting cash, you're probably (not always!) ahead of the game. If a person is willing to let their lease go after a large down, they might have a dog car that can't be sold, or they might be distressed and need to get out from the payment, or both!
2. Low residual compared to the value of the car.
A pretty simple method that's kinda quick and dirty is to add up the remaining payments, add in the residual, and that's the "price" of the car. Compare that to what the car sells for now, and what you think it will sell for at the end of the lease. The trick to making out well on assuming leases is to find those gaps. James took over the lease on a car that retains it's value amazingly well, and his buyout was probably well below the market value of the car. As long as his payments weren't so high as to offset that, he made out very well. Knowing that the original leasee made a large down, I'm supposing that the payments were not high enough to offset the low residual.
Suppose I see a car with 10 payments of $500 left and a residual of $10,000. I will be shelling out $15,000 in total for the car. If the car has a current market value of $15,000, we're "break even" but we still need to think 10 months ahead. If one year older versions sell for $13,000, we're probably going to be fine, maybe a bit ahead. If one year older models sell for $8000, we're in do-do. With "leasebusters" and others, you want to take the time to look for hidden value. It's a bit of a guessing game, but what isn't?
