We’ve all heard about buyer’s remorse. But how about leaser’s remorse? Some consumers who hope to get out of their car leases—or who want to take over someone else’s lease on the cheap—are turning to lease trading websites, notably LeaseTrader.com, which handled 60,000 lease transactions in 2009 and is on pace to handle 70,000 this year.
For folks looking to unload their leases, the attraction is obvious: These websites put them in touch with all sorts of people who might be willing to take over the payments. For those in the market for a car, these sites allow you to shop around, negotiate, and take over a lease without ever having to hand over a down payment. Both sides of the transaction, however, incur fees that’ll run at least a couple hundred bucks.
Below, LeaseTrader’s John Sternal answers my questions regarding how the site works, what kinds of fees consumers can expect, and advice for both sides of the lease-trade transaction. If you’re seriously considering lease trading, it’s also worth your time to look over this Edmunds story, which provides a good overview of lease trading and includes details on LeaseTrader competitors such as Swapalease.com.
What kinds of cars tend to show up in large numbers at LeaseTrader? In browsing the listings, I see lots of high-end luxury vehicles — BMWs, Mercedes, etc. Also, have noticed any trends since the economic downturn began — for instance, have the kinds of cars listed on your site changed much?
LeaseTrader’s John Sternal: Yes, it is true that the LeaseTrader.com marketplace offers plenty of choices on high-end leases. But Fred Flintsone would have loved this site. Leasing in general tends to skew towards the luxury and high-end side of automotive, but there are all kinds of vehicles in the marketplace. There are fewer SUVs to reflect fewer on the road today. We’re also seeing more domestic vehicles from GM and Ford as these companies have done a remarkable job raising the profile of their vehicle lineup.
What parts of the lease-trading process are negotiable? And what tips can you offer to consumers trying to negotiate taking over a lease?
JS: While you can’t rewrite the contract during a lease takeover, you can certainly negotiate with the “seller” during the deal. Like marriage, you can always find ways to negotiate but sometimes that means compromise on other areas. Of course if the seller is really desperate to get out of the contract (which happens a lot these days) you’ve got a lot of power. One big area to negotiate is in the monthly price. Ask the seller to buy down the balance of the lease, which will lower the monthly price.
How, in your opinion, does a buyer get the best deal while taking over a lease? Are you more likely to get a deal on certain kinds of cars, or if you’re taking over a longer/shorter lease, or what? And what qualifies to be listed as a “Hot Deal” on your site?
JS: A lot goes into consideration for a “Hot Deal.” As you may or may not know, leasing is all about mileage, months and price. Some listings are hot deals because of a low monthly price, while others are a hot deal because there is a lot of mileage remaining on the contract. The key in getting a good deal is knowing what’s important to you and also knowing where you can give a little. For example, if your hot button is having a lot of mileage, search for cars with lots of mileage left and be willing to give a little on the best possible price. Having more miles left on the contract will pay for itself in the long run.
Before someone takes over a lease, what fees should one know about ahead of time?
JS: To take over a lease it costs $39 for credit verification and a 60-day membership; it then costs you $149 to begin the transfer. These are LeaseTrader.com’s fees. The leasing company also charges a fee to do the transfer and their fee can range anywhere from $75 – $600, depending on which leasing company you’re with. Why such a big range? That’s an excellent question for the leasing companies, and one we’ve been trying to address with them for years. Understand that it’s important to do the credit verification up front so that we know every single interested party has the appropriate credit to take over someone’s lease payment. There is no down payment when taking over a lease, so that’s good for several thousands of dollars remaining in your pocket.
To get rid of a lease it costs a one-time fee of $89 to list the vehicle on the site, followed by a fee of $149 to begin the transfer process (both sides pay a transfer process fee).
Along those lines, what complications should someone know about ahead of time before taking over a lease? For instance, how does it work if the purchaser and seller live far away from each other?
JS: LeaseTrader.com always recommends you find a car in your own area. But we’re a nationwide service and we handle cross-country transactions daily. When that’s the case we offer two very key third-party services to help you get the car of your dreams. We offer a vehicle inspection report that comes with a full vehicle history and lots of pretty pictures, so you know exactly what you’re getting. We also offer transportation quotes to ship the vehicle to you. The great benefit here is that you don’t have to ship the car back at the end of the lease.
From the seller standpoint, what are some tips for unloading your lease as quickly as possible?
JS: You want to do some research to see what similar cars are listed for. If you’re paying $800 a month and similar vehicles are listed at $600 a month, general economics rules say you’ve got to price your vehicle (by buying down some of the balance) competitively. Other than that, take lots of pretty pictures of your car. Remember, finding a good match is not unlike online dating – good pictures can mean everything.