More people trying to get out of payments they can’t afford
The economic downturn has left some consumers stuck with car leases they simply can’t afford.
Littleton resident Jeff Ross is one of many to represent a 29-percent spike in the number of Colorado families using the LeaseTrader.com trade program to escape a lease they can no longer afford. The online service connects lease holders with thousands of buyers looking to adopt the lease, and allows consumers to downsize into something less expensive.
Having been recently laid off from his job as an engineer — a casualty of the recession — the last thing Ross wanted to do was pay as much as $8,000 to get out of his leased 2007 BMW 335i. So, like many other Coloradans, Ross turned to LeaseTrader.com.
“I used the money that I would have spent on paying off the lease to get a new vehicle for me,” he said, noting that he is now saving money having purchased a used Ford Explorer.
Similar to a classified posting, users post pictures and descriptions of their vehicles, hoping to find a consumer looking to adopt their lease. For this service, sellers pay a $79 service fee. If a transaction is successful, then both parties pay a final $149 transfer fee.
The benefit to sellers is obvious — they save a lot of money. But John Sternal, vice president of marketing for LeaseTrader.com, says the “untold story” is the benefits to buyers.
“Everybody knows us as the company that gets you out of your lease, but believe it or not, the benefits are actually greater to the person taking over,” said Sternal.
He points out that people adopting the lease benefit by not paying a down payment, as well as being able to customize their search by looking for vehicles based on mileage and lease expiration dates, to name a couple.
Buyers also benefit from being able to adopt a short-term lease, said Sternal. If someone wants a 10-month lease, they can find a 10-month lease; if a consumer wants a 14-month lease, they can find a 14-month lease, he said.
“In today’s economy, where people are really not interested in locking themselves into a 60-month lease, or a 48-month lease, that’s a pretty big benefit,” said Sternal. “A lot of our customers tell us, ‘I just want a car for a year, I don’t know what’s going to happen after that.’”
People looking to take over a lease pay a $39 sign-up fee, which covers necessary credit checks.
Not everyone, however, uses lease transfer and assumption services because of financial difficulties. Highlands Ranch resident Cristina Julia needed to give up her 2008 Lexus IS 350 because the family was expecting a second child. Becoming a family of four, it was time for them to get into a larger vehicle.
“We just decided that we didn’t like the car we had and that we wanted to get into a larger vehicle,” said Julia.
Sternal stopped short of calling the business “recession-proof,” but said it certainly is “recession-resilient.”
He said when times are good, people use the service to upgrade, but that when times are bad, people use it to downsize. While a year ago consumers said they used LeaseTrader.com because of mortgage worries, today the biggest concern is employment.
“I guess you’d call us the middle man that glues all the different parts together,” said Sternal.
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