May 14, 2001
Looking to lease a new car? Be ready for serious sticker shock. Automakers and finance companies have been scaling back the residual value of most cars, trucks and vans. While this doesn't affect the price for buyers, it makes a huge difference in monthly lease payments.
A Cincinnati-area company has come up with an imaginative solution that helps motorists who are looking for an affordable lease and who are willing to accept a short-term lease on a used vehicle. It also spells relief for drivers who, for one reason or another, want to get out of their lease early.
Called Swapalease, it's basically a matchmaking service. The consumer who wants out of an existing lease pays $49.95 to list his or her vehicle -- make, model, remaining term on the lease, the monthly payment, the geographic location and a photo.
Shoppers who find a deal that suits them must be approved by the financial institution holding the lease. The credit application fee is included in a $19.95 fee paid by the browser.
As in any automotive transaction, there's room for haggling. The buyer may want a few goodies thrown in. Sellers often include a month or two of payments. Once the buyer and seller agree, the seller pays a $95 success fee and Swapalease works out the details with the lender.
Unlike informal lease transfers between individuals, which can be very risky, Swapalease offers the seller a complete release from any obligation to the lending institution. If the buyer doesn't make the payments or fails to maintain the vehicle, it's not the seller's problem.
Swapalease was established by The Joseph Automotive Group, which owns 18 auto dealerships in the Cincinnati and Dayton areas. It presently operates in Ohio, Kentucky and Indiana but is in the process of expanding and hopes to be nationwide soon.
Swapalease says it has listed 1,200 vehicles and closed 200 deals so far.
