Auto-lease trading is becoming more popular among those who can't afford to pay off or purchase long-term leases in the midst of economic uncertainty.
In the past 10 months, Miami-based Leasetrader.com has seen a 29 percent increase in auto-lease trades in Denver. Cincinnati-based SwapaLease .com has seen a 54 percent increase in traffic on its website in Denver.
Lease trading allows a leaseholder to get out of an auto lease if that person finds someone to take over the monthly payment.
The new owner is responsible only for the remainder of the lease contract — not a down payment as with the original lessee — and can choose to purchase the car at the end of the lease.
Glenn Davis of Westminster used Swapa Lease.com in April because he wanted to get out of his monthly payment and purchase a less expensive car.
The lease was on a 2008 Mercedes- Benz GL450 with 14 months left on the contract and a payment of $850 a month.
"I didn't think in this economy anyone would want to take over my payment," Davis said. "But in this age of instant gratification, somebody can now drive a more expensive vehicle for a lesser period of time than they normally could (afford)."
Within a week of posting on the website, he received about 20 inquiries, and by mid- May the car was off his hands. Mercedes charged the new lessee a $595 transfer fee.
For Denver resident Grant Kirsh, Leasetrader.com helped him take over a 2007 BMW X5 4.8i. He will pay $500 monthly for 12 months.
"It makes so much economic sense," he said. "People may not want to drop $30,000 on a car and get tied to a three-year lease."
The original owner had made a $15,000 down payment, Kirsh said. Swapalease.com expects nationwide growth to be 30 percent from last year, projecting 100,000 transactions for 2009. Leasetrader.com projects 60,000 nationwide lease transfers for 2009, up 24 percent from last year.
John Sternal, vice president of marketing and communications for Leasetrader.com, said the company has a waiting list of people interested in picking up short-term leases.
"In this economy, people are really hesitant to sign up for a long-term financial commitment," he said.
Although the Better Business Bureau of Denver reported no complaints about lease-trading companies, Tim Jackson, president of the Colorado Automobile Dealers Association, urged caution.
He said the original lease owner could still be obligated to make lease payments if a new lessee for some reason refused to.
Downshifting on auto leases
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