Thanks to the Internet, getting out of a lease contract early is only a click away.
By Jim Ostroff
Kiplinger Business Resource Center - June 28, 2007
Feeling trapped in your Car Leases? Go online for an exit strategy. A few Web sites offer matchmaking services to help businesses and consumers with leases find others willing to pick up the remainder of their contracts. Fees charged by sites such as LeaseTrade.com, LeaseTrader.com and Swapalease.com vary, but figure on about $75 for both buyers and sellers, with the latter paying an additional $200 to $250 to transfer the car title.
The online lease trading market is quickly shifting into high gear, in step with a burgeoning car leasing market totaling about 17 million vehicles at present. Roughly 1%, or 170,000 leases, will change hands via the Internet this year, about triple the number exchanged two years ago. Transferring the contract to someone else saves the current leaseholder from having to pay the balance of the contract if he or she turned in the car early -- just like someone who returns a weekly car rental after one or two days but still pays the weekly price.
Rising sticker prices for higher-end vehicles have made leasing a more attractive option than buying for many individuals and companies determined to have a snazzy set of wheels. Meanwhile, lease periods are getting longer, with contracts often running four to five years, compared with the traditional three years. This boosts the chances that lessees might want to terminate the agreement before its expiration date.
In a big turnaround from a few years ago, most automakers now allow leases to be transferred from the original holder to secondary buyers. Honda and Hyundai are the remaining holdouts. Online sites typically run credit checks on people who want to assume auto leases, weeding out those unlikely to be acceptable to the leasing company.
Beware: Those looking to assume a lease should read the fine print on a contract before making the deal. Long-distance commuters or salespeople who travel 15,000 miles or more a year by road, for example, should make sure that they won't exceed the lease's mileage limitations or they'll face penalty charges.
"A salesman who drives a lot will look to take over the lease of a car with a large amount of mileage left, while another person who drives locally is fine assuming the lease of a car with fewer miles" left on the lease, says Sergio Stiberman, president of LeaseTrader.com.
There is another caveat. As with any major purchase, especially one involving a financial service such as leasing, it's best to do business with a company that lists a telephone number on its Web site and provides access to support personnel who can field questions or handle problems. You can also check the company's bona fides with the Better Business Bureau.
This story posted by LeaseTrader.com, the automotive service company that lets people transfer out of their Car Leases early. If you're looking to swap a lease or transfer out of your car lease, please visit www.leasetrader.com