Getting that car of your dreams just became a little easier, thanks to LeaseTrader.com . The Web site allows you to trade your vehicle to someone else so you can obtain something different—or lets you get that luxury car off your own hands by handing over the lease to another person. Windy City Times talked with John Sternal ( Pictured ) , vice president of marketing communications at LeaseTrader.com, to learn more about the program.
Windy City Times: Could you describe the whole concept behind LeaseTrader.com?
John Sternal: Sure, but let me first explain how and when it started. About 10 years ago, a gentleman by the name of Sergio Stiberman—who is now the founder and CEO of the company—was driving around in a BMW, and he had about 14 months to go on his lease. And for no other purpose than the fact that he was bored with his car, he wanted to get out of his lease and get a different BMW. So, he went back to the dealer who sold him the lease and said, 'Listen. You told me when I was done with the car that I could come back and that you would get me out of the [ lease so ] I could get something else.' The dealer said, 'OK. You have 14 months left on the lease, so write me a check for $15,000—the balance on the lease—and I can get you out of that car.' Well, Sergio said, 'I'm not going to pay you the remaining balance and give you the car; I might as well keep it.' And that is what most people face today when people need a way out of their car; there's no way to break out of that contract.
Sergio knew that there were other people who would be more than happy to pick up where he left off on his car, so he set out to create this online marketplace. It's very similar to a matchmaking site, [ except ] one person wants out of [ his ] lease and someone else is more than happy to pick up where the other person left off and complete the remaining terms of the contract.
WCT: So it's not about switching vehicles?
JS: It's a one-way transaction. You're either getting out of a car or getting into a car, but you're not trading with the other person.
WCT: And I'm assuming this would be more likely to work with a luxury auto than with, say, a Nova?
JS: [ Laughs ] Well, I'll be honest with you: The majority of our cars are probably in the luxury category, but that's only because the majority of luxury vehicles are leased. But we have plenty of Fords, GM cars and Chevrolets. We have a lot of what you would call average cars because, for example, somebody is moving to New York City because of a job transfer. That person will just take the subway; it might cost that person more to park each month than to pay the lease.
WCT: And you're preaching to the choir because the situation in Chicago is very similar. So, how long does a typical transaction take?
JS: Well, you go online and post your vehicle. We have thousands of people shopping for cars, so once they find you, you talk and negotiate; then, we step back into the picture and handle the transfer of the formal ownership. That transfer takes about two or three weeks.
WCT: You have 'hot deals' on your Web site. What makes them different from regular deals?
JS: Everyone leases differently. If you take a BMW 3 series, for example, you'll never find two [ identical ] deals because everyone negotiates differently, everybody tries to get different terms [ and ] everybody puts down a different down payment. Some deals are a little bit better than others. Plus, when you're advertising your car on the site, there are different levels that you can choose to market your vehicle. Sometimes you can get better placement if you're willing to be more aggressive with your marketing. So, all of that factors into [ becoming a 'hot deal' ] .
WCT: What do you do to cut down on the possibility of someone trying to pull a scam?
JS: It rarely happens because, with the transfer of ownership, [ there's all ] this paperwork involved and dealing with the car lease company; it can become such a headache. You can try to do this on your own, but it's not worth the time, effort and headache. We've got a whole transfer department that does all of this day in and day out. Plus—and this is the bigger reason why it's better not to do this on your own—if you want to get out of that vehicle, it's one thing to find somebody else to take over your lease, but it's another thing to find someone who's credit-qualified to take over that lease. Anyone who wants to be a buyer on the site has to get a credit check from us. The seller already knows that anyone we put in contact with them has the credentials to take over the lease payments, so [ he ] won't be wasting time.
WCT: How popular is your site?
JS: In 2006, we handled 20,000 transactions. In 2007, we handled 35,000 transactions and we're projecting 45,000 transactions this year. The more people who become aware of this option and that this site exists, the people there are who want to try it out. I'll be honest with you: We have a lot of repeat business; once people realize they can have a different car every 12 months, they're in heaven.
WCT: So could I afford to lease a Lamborghini on a managing editor's salary?
JS: [ Laughs ] It's possible, depending on how desperate that Lamborghini owner is to get rid of that car. But that's where negotiating comes in. You could get the seller to pick up transfer fees or even entice the seller so that your monthly payments are less than what his monthly payments were.
WCT: Is there anyone that this site is not good for?
JS: Absolutely. One of the first things we talk about is if that person is, first and foremost, a candidate for leasing. There are a couple ways to figure that out: If you're going to drive more than 15,000 miles a year or if you're going to want to hold on to your car [ for more ] than four years, you're probably not a good candidate for leasing. It's probably better to buy or finance a car because the numbers will probably be better for you.
Also, leasing is based on credit. So if you're not in good standing, you're probably not going to be approved—and you're checked by the lease finance company as well as by LeaseTrader.com .
WCT: Is there anything you wanted to add?
JS: [ One trend ] we've seen is a 24-percent increase in the number of people who want to downsize their vehicle; that, for us, is very significant—and that is [ attributable ] to the slowing economy.
See www.leasetrader.com for more.
