Getting out of Car Lease easier nowadays
By Laura Layden
Naples Daily News
Sunday, September 23, 2007
The following story was published in the Naples Daily News in Naples, Florida.
After moving to an assisted living center in Naples, Kenneth Neil Ragland found himself driving less and less.
His health worsened and it got to where it didn't make sense for him to have a car anymore. Yet, he was stuck in a lease that kept siphoning money from his bank account every month.
In years past, Ragland, 76, might have reached a dead end when trying to get out of his lease. But he easily found someone to transfer it to with help from LeaseTrader.com. Through its Web site, the company, based in Aventura on the east coast, does the match-making.
Ragland's son, Neil, who lives in Atlanta, handled the deal for him.
"It was a peace of mind thing. I think he recognized his condition is getting worse. So he is just trying to get anything dealt with now, while he's feeling more like it, than maybe later," Neil Ragland said.
The lease transferred about two months ago. It took less than a week to find someone to take it over, Ragland said.
The lease had cost his father, who has Parkinson's disease, $200 a month. It was for a Chevrolet Impala that he didn't drive anymore.
The buyer who took over the lease got a "great deal," Ragland said, because he didn't have to put any money down, has a low monthly payment and has a car with a few thousand miles on it.
LeaseTrader.com is just one of several online companies now offering an easy way out of leases without penalties. Another is Swapalease.com, which bills itself as the "largest automotive lease marketplace."
Scot Hall, executive vice president of Swapalease.com, calls LeaseTrader.com a "worthy competitor." But, he said, the rest are small "mom-and-pop" operations.
"At the end of the day, we are essentially a classified automotive Web site specializing in automotive transfers," he said.
Founded in 1999, Ohio-based Swapalease.com has transferred more than $400 million worth of leased vehicles.
The idea for the company was born on the showroom floor of an automotive group in Cincinnati.
"The way it was hatched is that the principals at our dealership were tired of not being able to sell cars to people that were stuck in leases," Hall said.
In the past, it was possible to transfer leases, but finding people to take them over was difficult, he said.
Today, there are more than 8,000 vehicles listed on Swapalease.com.
"We definitely see our fair share of SUVs hitting the Web site. But we've noticed growth in all sectors," Hall said.
The company has grown by every metric, he said. It now has two offices with 30 employees.
Sergio Stiberman, CEO of LeaseTrader.com, was a pioneer. He dreamed up the idea for his company in 1997 after he found himself stuck in a lease for a BMW. He had about 12 months left on his lease when he decided he wanted a newer model.
The dealer told Stiberman he could get out of the lease if he paid the $12,000 to $13,000 he still owed on it, said John Sternal, vice president of marketing and communications for LeaseTrader.com.
Stiberman decided to keep his car. Less than a year later, he founded his online marketplace for leases.
"Most people, they think 'I have to go back to the dealer.' Sure they are going to say they will help you. They'll roll the negative equity into the new car. That's a bad situation to be in," Sternal said.
Most leasing companies will allow the transfers, but there are a few that won't and some that put additional restrictions on them, such as requiring the seller of the lease to keep their name on it, Sternal said.
There are any number of reasons why people want to get out of their leases. Maybe they get a new job that comes with a company car, or their kids leave home and they don't need the minivan anymore. It may even come down to color: They want a red car instead of blue.
Buyers like the transfer service because they don't have to be strapped into 48-month contracts and they don't have to pay thousands of dollars for a downpayment.
"You can buy down the car's price to make it more of an attractive offering to a buyer," Sternal said.
LeaseTrader.com has seen a lot of growth. In 2006, the company handled 20,000 transactions. This year it expects to do 35,000.
"We have four times as many buyers as we do sellers, which means the demand has definitely grown. No doubt about it," Sternal said.
Florida is its third most-popular state for transactions. California is first and then New York.
Swapalease.com does most of its business in five states: California, New York, Ohio, Florida and Michigan.
“We do have a national footprint and we also do business throughout Canada as well,’’ Hall said.
It's common for the company to transfer a car from one state to another, he said.
The fees for the transfers depend on the company you choose.
For buyers, LeaseTrader.com charges a membership of $39 that's good for 60 days, which includes a credit verification. The seller pays $79 to list the vehicle on the site, which is good until it sells.
Both the buyer and the seller pay a $149 transfer fee.
On the seller side, Swapalease.com offers a variety of packages. The base package goes for $49.95 and the seller pays a $95 fee if the transaction is successful, Hall said.
The most expensive gold program is $149.95, which includes additional advertising for vehicles and a higher level of customer service, he said.
On the buyer's side, three packages are available, ranging from $34.95 to $79.95.
The company offers a vehicle inspection service at an added cost of about $100.
Though the lease transfer companies are online businesses, Ragland said his dealings with LeaseTrader.com were "very interactive." There were a lot of phone calls, e-mails and mailings back and forth, he said.
Ragland said he was surprised by how little he paid for the service he got. But, he said, the process is time-consuming.
"It's just a lot," he said. "It's like buying a house practically or buying a new car."
But it comes with a payoff: No more lease.
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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.
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