LeaseTrader is introducing a "Nationwide Car Lease Bailout Program" that aims to transfer car and truck leases to creditworthy people within a week or two, down from the company's current average lease transfer of three to seven weeks, said John Sternal, VP-marketing. Consumers who use the service will get more visibility on the marketer's website, paying $79 for the service plus $149 to transfer the contract to a credit-qualified replacement lessee.
Increase in customers
LeaseTrader, which works with virtually all automakers' captive finance arms that handle leasing, has seen about a 30% increase in the number of people that are listing their vehicles to exit contracts early. Mr. Sternal said the majority of these thousands of people are doing so because they are close to default.
Those exiting contracts early must either pay off the entire balance or roll negative equity into a new car. Mr. Sternal said that "both situations are financially impossible for many families in today's economy."
Last year, the company completed some 35,000 transfers. This year, the transfers will push past 45,000, he said.
Though it may seem surprising, there are three times as many people looking to take over leases this year than in 2007. That's because the second lessee picks up only the time left on an existing lease, so it's not necessarily a long-term commitment. There's also no down payment on a lease transfer.
Earlier TV spots
LeaseTrader will start a series of e-mail campaigns to subscribers this week. No ads are planned. The private 10-year-old company handles all its advertising and promotions in-house. The marketer's first TV commercials, a pair of 15-second spots that aired on national cable TV networks earlier this year, were handled by an unnamed freelance production company. LeaseTrader relies heavily on search-engine marketing, Mr. Sternal said.
Among the Detroit automakers, General Motors Corp. had the lowest percentage of leases across the U.S. in the first 7 months, 15.8% of all its new-vehicle sales, while Ford Motor Co. was next with 19.9%, according to researcher Power Information Network, an affiliate of J.D. Power and Associates. BMW Group had the highest percentage of leases among all carmakers in the U.S. in the period at 53.5% of all its sales, PIN reported.