Want out of a car lease? Try trading

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Lease trades, when a person takes over someone else’s lease, are proving increasingly popular with drivers who are looking for creative ways to get out of their current cars and into new ones.

This might happen in an economy of severe job losses, like today’s environment, when the lease holder can no longer afford the payment. Or it could simply be a cheaper alternative for drivers who need a car for a shorter term than a car loan or even a full-length conventional lease would require.

While the lease-trading process can occur between any two parties who find each other through a variety of ways, such as an advertisement or on the Web site Craigslist, a lease trading service is the more common method. As its name implies, this is a third-party service that helps current and new lease holders transfer or assume car leases. Two companies, LeaseTrader.com, based in Miami, and Swapalease.com of Cincinnati, are two of the most popular of these services. Both companies have been in the business for more than 10 years.

For current lease holders who have experienced a job loss or other financial hardship, finding someone to take over a lease can help them get out of a tough financial situation without damaging their credit. Once the lease has been assumed by someone else, many car lease holders then find another cheaper lease to assume, according to LeaseTrader.com research.

For drivers who are interested in a new General Motors or Chrysler vehicle but are uneasy about buying given each company’s recent turmoil, car lease trading offers the ability to assume a lease for one of these vehicles without the potential burden of ownership. Recent research by SwapALease found that searches for most GM vehicles have remained steady or have increased, while it noted that the Chevrolet Corvette and Hummer vehicles were among the highest in demand. Similarly, LeaseTrader.com reported a waiting list for Chrysler leases.

Assuming a car lease is also a popular option with people who need a car for a short term, because lease assumptions can be as short as five months and allow the new lease holders to obtain a lower payment than a loan with no money down.

It’s also proving to be an alternative for parents who want to give recent college graduates a new car when affordability is an issue. LeaseTrader.com reported a 16 percent increase this year over last year in customers assuming leases for graduation gifts during the gift buying months of March and April.

“Large down-payment requirements and lengthy terms make it difficult for most people to get a car as a graduation gift. (Lease trading) allows a person to search for the right car, payment and length of contract that fits their needs,” said Sergio Stiberman, chief executive and founder of LeaseTrader.com.

As long as you have good credit, anyone can assume a lease, while current car lease holders can get out of their leases as long as the leasing company allows it and most do. Yet escaping a lease or assuming a new one does involve some cost. There are fees to transfer the lease, which range from about $50 to $500, depending on the leasing company. If you use a lease-trading service, current and new lease holders usually pay fees to the company for setting up a match. For complete details on how the process works, read “Escaping a car lease gets easier.”

While lease trading certainly isn’t for everyone, it is an affordable option for certain situations and is one way to remove some of the financial burden for lease holders who find themselves in a cash crunch.

Read more Driving for Dollars columns and Bankrate auto stories.

Tara Baukus Mello is a freelance writer who has written about automotive topics of interest to consumers since 1995. If you have a car question, e-mail it to us at Driving for Dollars.