Web sites let drivers swap vehicle leases

Companies link car buyers with owners who want out of their contracts.
DETROIT (AP) -- People who want to jettison vehicle leases increasingly are turning to Swaplease.com and other Web sites that help them find others who want to take over the obligation.
Bob Lee already had two cars in his garage a few years ago but wanted a 2002 Porsche Boxster. By September, the Moreland Hills, Ohio, businessman found himself with 18 months left on the four-year, $500-a month-lease and an urgent need for cash to start a business.
Terminating the lease early would have cost him about $9,000.
Instead, Kevin Grogan of nearby Stow, Ohio, took over Lee's lease in a deal reached through Swapalease.com, one of several Internet companies that link car buyers with owners who want out of their contracts.
The sites began about five years ago when lease terms started growing beyond two and three years. Longer leases help keep monthly payments low, but customers soon found they did not like being stuck with a vehicle that long and began looking for a way out.
The sharp decline in stock prices and job losses added to the urgency for many consumers.
"All of those 25-year-olds with BMWs suddenly found themselves on the street and wanted to get rid of those things as fast as they could," Art Spinella, head of Bandon, Ore.-based CNW Marketing/Research, told The Detroit News for a story Thursday.
The largest
The privately held, Cincinnati-based Swapalease, the largest of the Web sites, lists 20,000 vehicles and has transferred 3,000 leases since it started in 1999, according to marketing director Pawan Murthy.
Swapalease was created by the Josephs Auto Group, a 22-store new car dealership chain in Cincinnati, to stem lost sales.
"They realized as people came onto their lots that they wanted to buy, but were stuck in a lease," Murthy said.
As leasing contracts expand to four years or more, sites such as Swapalease.com, Leasetrader.com and LeaseTrading.com are seeing their traffic increase.
"People who lease don't want to keep their vehicles more than three years," said CNW's Spinella. "Even buyers would like to get out of their cars within 38 months."
Each of the Web sites has its own quirks, but they work similarly. A person who wants to get out of a lease places an ad for typically $50-$150. Someone interested in the vehicle or who just wants to browse the site pays a $35-$80 membership fee, which generally includes a required credit check.
The two ends of the deal are put in contact and if the new lessee's credit checks out, and the finance unit and dealer approve, the lease and the financial obligation for the remaining payments are transferred.