Here's an interview I recently did via email with Sergio Stiberman, CEO of LeaseTrader.com. This is NOT an endorsement of this service (I know nothing about it) and I was NOT paid to run this post. But I do think it's an interesting topic and one that may be able to help some people:
What is LeaseTrader.com and what does it do?
LeaseTrader.com is an innovative company that helps people get in or out of their auto lease before it expires. Available to users nationwide, the Web site helps connect consumers who want to end their vehicle lease early with those who want to assume a short-term lease.
How does it work?
The process for using LeaserTrader.com is simple: Lease sellers and buyers register online at www.LeaseTrader.com. The seller posts their car’s picture and lists a variety of information, including vehicle details, lease terms and mileage balance. Buyers browse the listings and contact the seller if interested in assuming the lease. The buyer is responsible for checking the vehicle for damage, excess wear and service history. The original lender will determine whether to transfer the lease based on the buyer’s credit score. LeaseTrader.com has patent-pending technology that will expedite and streamline the process of obtaining vehicle damage and history for the buyer, as well as credit authorization. Both LeaseTrader.com and the lender charge processing fees for the transaction. The buyer and seller then proceed to work out how to transfer ownership of the vehicle.
What are the savings?
For sellers, terminating an existing car lease can be a tedious process with inescapable financial consequences. Life events like marriage, a new child, job transfer and income changes have all prompted consumers to look for a way out of their car lease. And early termination of a car lease may cost several thousands of dollars, making it financially impossible for many to exit their lease agreements without facing hefty penalties from the leasing company or dealer.
Consequently, many buyers are unable to afford quality vehicles because of large down payment requirements and rising interest rates. As a result, LeaseTrader.com lets consumers lease a nicer vehicle than their current one without the need for large down payments. Additionally, buyers can find cars with shorter lease terms instead of being financially committed to 36- or 48-month lease terms from a traditional dealer.
What are the costs?
For the seller, there is an advertising fee of $79.95 to post your vehicle online with information and pictures, and a brokerage fee of $149.95 when the transfer process begins.
For the buyer, there is a membership fee of $39.95, which includes a credit check and gives you 60-day access to communicate with any sellers on the site to inquire about their vehicles. There is also a $149.95 brokerage fee due when the transfer process begins.
How many people have you helped do this so far?
Thanks to LeaseTrader.com, individuals are now able to exercise options that they did not have in the past. We want to take away the feeling of being trapped.
[Note: He didn't really answer this question. I'm guessing it's a new service and they simply don't have any substantial numbers at this point.]
Why can you help break a lease and others can't?
Our service is designed with the consumer in mind. Our main interest is in making the transaction happen. In fact, the entire service started as a result of a personal experience of the founder, Sergio Stiberman. That being said, we’ve worked hard to educate the leasing companies about making the process as smooth as possible. As a consumer, you can transfer a lease, but we make it easy to help sellers identify credit-qualified buyers, and we take a personal approach in helping process all of the transfer paperwork with the leasing company.
Are there any specific tips you have for people getting a lease?
Know what you want and use the search tools available on the site to identify the exact type of car you are looking for. Also realize what your needs are as a buyer – how much per month are you willing to pay, how many miles will you need, and how many months do you want remaining on the lease? These are all critical factors in helping the buyer with a successful experience.
Are there any specific tips you have for people getting out of a lease?
Look at your personal page through the eyes of a buyer, and focus on the true benefits you have to offer. If you have low mileage, low monthly payments or a minimal amount of months remaining on the lease, emphasize your strengths.
Is there anything else important that readers need to know?
If you are going to get out of a lease with the intention of getting into a new lease, make sure the leasing company on your new lease allows for lease transfers. Although most major ease companies allow for transfers, there are still a small percentage that do not. Knowing all the details on your next lease will save you a lot of time, money and trouble.
I haven't used this myself, but my boss has used it mutiple times to pick up a cheap lease from someone who doesn't want a particular car anymore. It seems to be a great way to save money for any lease.
I'm not a leaser myself. But, if I were, it seems this would be a good way to save money.
Posted by: broknowrchlatr | June 22, 2007 at 08:56 AM
I looked around the website and there doesn't really seem to be any good deals on leases. Even if you save money by not having to put a down payment, all of the vehicles there have insanely high monthly payments which are much higher than if you were to lease the car directly from the manufacturer. (like I'm talking at least $100 more per month, and that seems to be the best deal there.)
Posted by: Dwight K. Schrute | June 23, 2007 at 06:41 PM
When I was stuck in my lease I shopped around the internet looking for lease transfer sites. I didn't list with Leasetrader.com as I found a more reasonably priced site at one tenth of the cost called Leasedwheels.com. I don't believe there was any compromise in service as I was still able to get out of my lease without having to pay a fortune to either the leasing company or Leasedwheels.com. In fact, my total exit cost was less than $20 which was the cost of the ad. I would suggest going this route and saving yourself a pile of money.
Posted by: Melanie Marks | June 26, 2007 at 06:36 PM
There's also Easyrelease.com for drivers to get out of a lease early and for others to take over a car lease transfer. It's a totally free service, free to list and free to contact the sellers. There's nothing to lose.
Posted by: Jason | July 23, 2007 at 05:15 PM
is selling one's vehicle any more cost effective versus transferring the lease thru a company such as "swapalease'
Posted by: brendon drkae | June 25, 2008 at 09:17 AM
hi,
I am moving from europe to the us in January. As I have no credit history I will not be able to lease a car despite being on a very good salary. Would I be able to take over a lease with circa 10 mths to go in spite of that, even willing to pay 10 months of lease payments upfront. Any thoughts appreciated
Posted by: Moving to. The us | November 27, 2008 at 04:05 PM