On the surface, ``cash for clunkers'' -- last year's federally sponsored program subsidizing deals for motorists who traded in a ``clunker'' for a new vehicle -- seemed like a great idea. But now, there's growing evidence of buyer's remorse in Florida and elsewhere.
One of the provisions of ``cash for clunkers' was that if you wanted to lease a new vehicle and still get the incentive -- $3,500 or $4,500 -- you had to sign a lease that was a minimum of five years long. According to the Miami-based Leasetrader.com , which acts as an intermediary between consumers who want to get out of a lease and those who want to lease a vehicle, some ``clunkers'' customers are already looking for a way out of long leases. Many are finding that even with the rebate, they are stuck with a big monthly payment for at least 60 months.
John Sternal, Leasetrader.com vice-president, said that while fewer than 20 percent of the 700,000 ``clunkers'' transactions were leases, his company is seeing a surprising number of lease customers looking to get out of them early.
``Around April or May of this year, we started to get a couple of calls a week from people who were saying, 'Hey, I did this clunkers deal, got a great rebate on it, and now that the dust has settled, I'm still left with a used car and 40-some-odd months left to go on the contract.' ''
Although no figures are available, Sternal said the number of calls like that ``have definitely increased'' since May. Many people, Sternal said, have either lost their jobs, or are afraid they will. Others simply bit off more than they can chew, and need to reduce their bills.
So what can they do now? Unfortunately, not much.
``Here's the problem,'' Sternal said. ``A year later, you still have a 48-month contract. And you can go into almost any new car dealer today and get a brand-new car on a 36-month lease. Prices at the retail level are incredible right now.''
So what is Sternal advising people to do? ``That you just have to hold onto the vehicle,'' Sternal said. ``There's very little market out there for what they have. If they can wait it out until the lease gets down to 30 months or so, we should be able to help them out.''
Other options all have serious downsides -- having the car repossessed will damage your credit, and won't release you from all financial obligations. Lease contracts spell out penalties for ``early termination,'' and they can cost thousands of dollars on top of the monthly payments you already owe.
Business, then, is good for Leasetrader.com . Despite the name Leastetrader, and the name of a competitor, Swapalease, you don't have to actually trade or swap leases with another customer.
``All transactions are one-way,'' Sternal said. His company charges flat fees for transfers, with a cost of $149 to transfer a lease to another party.
Jan Stoutamire of Plantation had a 2008 Lexus ES that she no longer needed, and there were two years left on a lease. To terminate the lease, she would have had to make all the remaining payments anyway. By listing it on Leasetrader.com , she found a woman in another state that assumed the lease on her Lexus. It took six weeks for Lexus to complete the transfer paperwork, ``but I was very happy with the way it turned out,'' she said. ``I didn't really understand the process of having someone in another state assume the lease, but Leasetrader.com walked us through it.''
And with so many people looking to get out of leases, it's a buyer's market. Dan Bendavid of Aventura recently assumed a lease on a Mazda CX-7 that had only eight months left on it. ``I got a great price on the lease,'' he said, ``plus the guy threw in $500 cash.'' It isn't unusual for people with leases who are motivated to get out of them to sweeten the deal, Sternal said.
Earlier in Leasetrader.com's 10-year history, ``We were seeing a lot of growth from people who wanted to upgrade their vehicles,'' Sternal says. ``And now, we're seeing the reverse, where everybody wants to downsize, to shrink the number of cars in their driveway.''
Read more: http://www.miamiherald.com/2010/09/25/1841254/some-suffer-buyers-remorse-a-year.html#ixzz10jdyMCo2
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