Driving a Bargain

THREE YEARS AGO, THAT sporty little convertible seemed like the perfect car. That was before you were married with a mortgage, a child and a baby on the way. Now, you--and hundreds of thousands of others driving leased cars--want to get out of that contract and into a different ride. There's only one problem: exiting early will cost you a bundle.

While the typical lease runs almost four years, the new-car itch hits the average driver every three, notes Art Spinella, president of CNW Marketing Research in Bandon, Ore. As many as 30% of the 17 million drivers holding leases in the U.S. say they would opt out if they could afford to.

The happy upside: a small but growing online lease-trading business now links eager car shoppers with people trying to get out of their contracts. Since the late 1990s, a handful of websites--among them www.leasetrader.com www.leasetrading.com and www.swapalease.com--have helped facilitate such transactions. You'll pay to dump a lease, but the price can be thousands less than you would owe if you turned the lease in early to a dealer. Meanwhile, buyers can pick up some sweet rides for hundreds less than their normal cost--with short-term contracts and no down payment.

The process of getting out of--or into--a lease generally works like this: lease sellers register (fees usually start at less than $50) and post their car's picture, lease terms, mileage balance and location. Buyers browse the listings and sign up to get contact information for the car they want. Simple enough, right? Buyers should, of course, be sure to inspect the car for excess wear and tear and high mileage, which can bring penalties at the end of the lease term. And study the fine print as you would a new lease, particularly making note of when the car's warranty expires. (It may have already.)

What if you're a truly motivated seller who can't wait for a buyer to emerge? LeaseTrading com launched a new feature this summer that lets qualified sellers drop out of a lease immediately. Naturally, it will cost you: so-called Instant LeaseRelease requires that you pay half your car's negative equity, which is the difference between the lease buy-out price and what the car is actually worth. It may be a fraction of what the dealer would charge, but you may want to think twice before driving down that road.