New York Post - July 21, 2005
When William Mitrus' son was born a couple of months ago, he knew it was time to ditch his BMW Z4 - a two-seat roadster that was tons of fun but just too impractical for a family of three.
But the Freeport, L.I., chiropractor still had a year left on his three-year lease, and returning the car early would mean eating the remaining $5,976 [$498 a month] on the contract, plus penalties. He got no sympathy from the local BMW dealership he had dealt with.
"I offered to roll right into another lease if I could get out early, but they said there was nothing they could do for me," Mitrus said.
Then, surfing the Web, Mitrus found LeaseTrader.com, an online service specializing in transferring car leases between buyers and sellers. For $79.99, he advertised his Beemer on the sight, and had a taker within a day. He paid another $150 after the transfer was completed, and presto, he was out of his lease for $230.
"It was extremely easy, and absolutely worth it," said Mitrus, who then tackled fatherhood by leasing a new Lexus RX330 sedan.
William Mitrus had to give up his BMW, similar to the car below, and switched to the Lexus sedan behind him. He was able to get rid of his BMW lease early by using LeaseTrader.com.
The business of buying and selling car leases has been growing steadily in recent years, giving consumers a better chance to get a good deal by finding the specific terms they want. Research done for LeaseTrader by CNW Market Research shows that over half the 17 million Americans leasing vehicles would look to get out of their deal early if they could.
The reasons for unloading a lease vary. Some, like Mitrus, experience an increase in family size. Others who tried to minimize monthly payments by agreeing to a low mileage limit find themselves headed way over the threshold, at a typical cost of 15 cents a mile. And some are just bored with the vehicle that excited them a year or so earlier.
"Trends change quickly, and people are always looking for new options, different styles," said LeaseTrader.com CEO Sergio Stiberman, whose frustration with trying to get out of his own BMW lease spurred him to start up the business in 1998.
"I was locked in, and I figured there had to be more options," he said.
Based in Miami, the firm has grown to 28 employees and to $3 million in projected sales this year, triple its 2004 revenue.
In addition to charging sellers to post their cars, the company hits both buyer and seller with a transfer fee - usually $150 apiece - after a deal closes. It handles buyers' credit checks, only giving them access to car postings if they pass.
Buyers also pay the freight if they hook up with a match from out of the area. A New Yorker taking over the lease of a car in Wisconsin, for example, can expect to pay between $500 and $1,000 in shipping charges.
A typical buyer, according to Stiberman, might be someone with a child close to starting college who wants a car for just a year or so. Sometimes, a motivated seller will offer "incentives" like cash or a willingness to give up the original security deposit to the buyer.
Tips for transferring an auto lease
Buyers
Look for a vehicle that offers an incentive, like cash or security deposit transfer. That can lower the effective monthly payment.
Check the current mileage against the lease's mileage allowance.
Know what you're getting into. Review the lease contract for redemption fees and any other potential surprises.
Sellers
Post as detailed a description as possible, with miles, engine size and options. Also include a photo.
Offering an incentive lures buyers, like a cash payment to cover excess mileage.
Post the car's Vehicle Identification Number (VIN). Buyers who want peace of mind will want to check its history on Carfax.
Print | posted on Thursday, July 21, 2005 8:53 PM