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Want out of car lease? These companies help

Updated: May 3, 2013 12:14PM

You leased a car, and now you hate it. Or you can't afford it. Or you just found the car of your dreams, but your current car lease runs for two more years. That's one great disadvantage of leasing a car. You're stuck. Or at least, you were stuck until two online companies came along to provide a marketplace to help people get out of their car leases. and provide that auto lease marketplace for a fee, helping consumers get out of existing leases. On the other side of the transaction, people looking for a shorter term lease, with no down payment, can find good deals by picking up the balance of someone's existing lease.

It's a fast-growing business. says it completed 6,000 lease transfer transactions in 2005, and based on first-quarter activity, expects 10,000 transactions in 2006. Scot Hall, director of lease operations, notes that his site has about 5,000 cars listed at any given moment. posted more than 20,000 lease transfer transactions in 2005, and is expecting volume to triple this year. At any given moment, about 20,000 cars are listed on its site, said CEO Sergio Stiberman.

How it works

The two companies have similar models, although they provide slightly different services, and charge different fees for their services.

There is no "matching engine." It works more like a dating service. Those looking for a lease can search free on either site. You can search in multiple ways: by manufacturer and model or by dollar amount of the lease or geographically. Sellers pay fees to list their car. And once you've found a car and want to contact the seller of the lease, you'll have to pay a "buyer's fee" to get the contact information.

A seller pays $59 to list the car. Buyers can get started for a 60-day membership fee of $29.95 that includes a credit verification -- a status that signals sellers you're a serious candidate to take over their lease. If you become a "premium" buyer for $79, you get one free vehicle inspection report. creates several different packages for sellers. At its most basic level, you can list a car for $49.95, and then pay a one-time fee of $95 if a lease transfer deal is consummated. Or you can simply pay a one-time fee of $99. Then there is a "gold listing," with more exposure through banner ads, for $149. SwapALease buyers pay either $34.95 for a 45-day membership, or $49.95 for a lifetime membership. (Remember, these are short-term leases so you might be back in a couple of years!

As the seller, you want the buyer to pick up your monthly payment for the remainder of the lease term. The buyer is looking for a good deal. So what's involved in pricing the transfer of a lease?

The number of months remaining on the lease and the monthly payment amount are key factors. But the value of the lease also depends on the number of miles remaining on the lease. The more allowed miles that have been used, the lower the value to a buyer. A seller might have to offer an "incentive" to the buyer, presenting an upfront check that effectively lowers the monthly lease cost.

Here are a few things to keep in mind after you've agreed on a deal.

*At you must handle the paperwork. charges buyer and seller a $149 fee, which pays for a representative to handle all aspects of the transaction.

*Confirm that the car is in the advertised condition either by a personal visit, digital photos or an independent inspection service offered by both sites.

*Check on leasing company transfer fees, which range from $35 for Toyota/Lexus to $595 to transfer a lease handled by General Motors.

Escrow services

If a lot of money is being transferred as an incentive, you might want to use an escrow service, available at each site.

The buyer must register the car, and pay appropriate taxes in his location, or the leasing company will add the tax amount for your state to each monthly payment.

Agree on how the car will be transported to its new location, and who will pay the cost.

If you're thinking that it would be easier to ride out your current lease than to get rid of it, you might be right. But if you absolutely must get out of your lease, it's nice to know that and are right at your fingertips. That's The Savage Truth.

Terry Savage is a registered investment adviser.

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