WALKING AWAY FROM CAR OBLIGATIONS
This article is from our archives and has not been updated and integrated with our "new" site yet... Even so, it's still awesome - so keep reading!
Published on Thu, Jun 17, 2010
By: The LACar Editorial Staff
The Accord is the most most popular leased vehicle Number of People Voluntarily Walking Away from Car Lease Contract has Tripled More people are voluntarily foreclosing on their houses, but are they also voluntarily walking away from their car contracts? The number of people voluntarily walking away from their car lease contract has tripled in the last 12 months, according to LeaseTrader.com. Since the recession began in early 2008, more than two thirds of all lease swaps were from people in financial distress from job loss or skyrocketing bills. But over the last 12 months a growing percentage of people are opting to escape their auto lease even though they’re fully capable of paying the contract. "There are plenty of people out there looking to exercise their own personal financial pruning," said Sergio Stiberman, CEO and founder of LeaseTrader.com. "The trend began with homeowners underwater on their mortgage walking away from their homes. But today there are other areas of a person’s finances where they’re making the decision to walk away from their obligation." To be fair there are differences between walking away from a mortgage and car lease. LeaseTrader.com helps people find a credit-qualified car shopper willing to adopt the remaining portion of the leasing contract with no harm to credit. Voluntarily walking away from a mortgage may entail financial and litigation penalties from the lender. Nevertheless, a third type of customer has now entered the LeaseTrader.com marketplace. In years past LeaseTrader.com catered to people that wanted out of a lease to upgrade their vehicle or because financial distress forced them to seek transfer. Today a third class is represented by those that can still afford to make their car lease payment yet simply want out of the lease contract with no plans to replace the vehicle. Many of these people simply downsize to shed excess cars accumulated during more profitable times. - John Sternal