I am planning to buy a used car from a person who is currently leasing this car.
What should be the sequence of events?
The seller has to buy out the car from the leasing company and then I will pay him for a car, correct?
The seller is offering me to pay for a car first so he can re-pay the leasing company and after that he would give me the car. Was not sure this is the safe approach, that's why asking your opinion/experience.
I would not give any money directly to the seller until the car is paid for. Write up a simple contract offering to pay off the lender, and then pay the owner any remaining difference to the price you are paying for the car.
This is a really risky thing in my mind, and hopefully you are getting a HUGE discount on the car. I did this once on a camper, and was able to get it for about 40% off the value, because no one else was willing to do the deal. I did have a lawyer write up the contract describing what was going on, but it was still risky.
Is there a way you can pay the leasing company directly? When I sold my car to a garage in the U.K. the garage could see I still had finance on it, they insisted on paying the finance company directly rather than paying me and me paying of the loan afterwards.
It has to be based on your feeling, but get a SIGNED contract with his full details and get him to surrender his ID card or Passport until the transaction is finalised.
Get the leasing company to agree to this, in writting.
If you think it stinks, walk away as it almost certainly does stink !
If someone cannot pay a car at the end of the leasing from savings or a loan, this person has financial problems. Not necessarily bad per se, but financial hardship makes good people do bad things. If it's a friend, acquaintance or family and you have reasons to trust them, it should be fine. Randos from the internet, no.
How does you buying him another car ("a car" isn't the leased car, right? that would be "the car") enable him to end the lease and pay the balance? That wouldn't affect his liquidity and ability to do his part one bit, if he can do it afterwards he can just as well do it beforehand.
It's not a scam as the seller is perfectly up-front with it. You need to be careful, do you have a good feeling about the seller ? Respectable, family, job, etc etc.
Sure you need to be careful, but from what you have said it is hardly a scam.
I would agree with some of the others here that it is not necessarily a scam, but homework needs to be done.
What is important to to check is if you have first right of purchase at the end of the lease. In many cases the lease companies or dealers take back leased cars, especially if they are in very good condition.
If it's a lease, field 178 in the car permit says "Changement de detenteur interdit", meaning "prohibited to change vehicle holder" or something like that. It means the cantonal vehicle registration office will not accept the transfer of vehicle title to another person until the leasing company tells them the debt has been fully paid.
There's an older thread on EF dealing with this topic.