As an alternative to buying a used vehicle, many consumers choose instead to assume a car lease. This process has resulted in an entire industry, and automotive tourism related to the process of trading or assuming leases has had a positive effect on many local economies.
John Sternal, Vice President of Marketing Communications for LeaseTrader.com, sat down with LoveToKnow Cars to discuss the industry of lease trading and its impact on automotive tourism.
LoveToKnow (LTK): What is LeaseTrader.com? How did you become involved in this business?
John Sternal (JS): LeaseTrader.com is a website that allows people to escape their car lease contract early without harm to their credit. They simply post their vehicle online and connect with someone else who wants to take over the remaining portion of the lease contract. People have a great chance of getting out as there's currently more demand on the buyer side because of the short terms remaining and no down payment required. We have a very high success rate of people looking to escape their leases.
I became involved in the business when doing research on breaking a lease. I realized there was an opportunity to create this marketplace since previously there was no way to escape a car lease early without getting slapped with expensive early termination penalties.
How to Assume a Car Lease
LTK: How is leasing a car different from buying a vehicle? What are the advantages of leasing?
JS: There are a few notable differences between leasing a car and buying a car. When you lease, the bank owns the car and you simply make rental payments each month. At the end of your lease, you just hand the keys back over to the bank. It's a great way to enjoy a different car every few years without worrying about the depreciation that comes with car ownership.
LTK: How does the process work when someone wants to assume a car lease? Why do people swap leases?
JS: If someone can't make the payments on their lease or if they've become bored with their car, they can't just hand the keys back over to the bank before the contract is over. The bank will ask them to write a check for the sum of the remaining payments. Lease transfer is a great way to satisfy your need to get out by simply transferring the car over to someone else so you can walk away. LeaseTrader.com works with people to find someone else, and the bank removes your name from the contract and replaces it with someone else's.
People trade leases for a variety of reasons, including job loss, job transfer, family growth, income change, family move, change in vehicle preference, etc. There are countless reasons why someone would want out of their lease.
Lease Trading and Automotive Tourism
LTK: What is automotive tourism? How is LeaseTrader.com involved in this industry?
JS: Dealerships all over the county are closing their doors. This is forcing more people to use the Internet to shop for a car. When this happens, people shop all over the country for the best deal, not just down the street. Automotive tourism happens when people travel across the country to pick up their car, make a vacation out of it, and then drive their car back. It's a growing trend that will only become more popular as we increasingly turn to the Internet for car shopping.
For LeaseTrader.com, more people are choosing to personally pick up a car they take over from someone else rather than have it shipped to their location. It's a great way to get a good deal on a car and take the family on a vacation.
LTK: How far and how often do people travel for your service?
JS: The majority of people travel up to ten hours of drive time away from their house to go and pick up a vehicle they've either shopped for online or a lease they've taken over via LeaseTrader.com. Most people choose to stay two or three days, providing a boost to the local economy through hotel stays, eating out at restaurants and taking in additional sights and attractions.
Used Cars on the Internet
LTK: What are the advantages to online car shopping? Do you have any tips for Internet car shoppers who plan to buy vehicles remotely?
JS: Online car shopping at LeaseTrader.com allows people to remove local boundaries when shopping for the best deal. Five or ten years ago, people could only shop at their local five or six car dealerships for the best deal in town. Today people can comparison shop at any of the hundreds of dealerships within several hours of their residence. The Internet allows people to truly get the best deal since more dealerships are competing to earn their business. Even on LeaseTrader.com, people can browse dealer listings on a new lease.
As always, do additional research on any dealership you want to do business with by checking the Better Business Bureau for ratings. You should also get quotes in writing so that there are no surprises when you travel to pick up the car.
LoveToKnow Cars would like to thank John Sternal taking the time to share what he's learned about automotive tourism and for providing information on assuming car leases and LeaseTrader.com.