Wednesday, June 16, 2010

Voluntary Foreclosure Generation Now Walk Away From Car Leases.

Have you ever walked away from a car lease before?

Over the course of the average week, I get tons of emails from bloggers, webmasters, PR firms and more and considering there is just so much I can do, most emails I will read get the same response, “wow, that’s interesting, good to know” and then delete. You see I just can’t work every email/press release into an article nor do I just publish press releases, this is a blog, not internet newspaper.

Don’t get me wrong, I love the fact that people know I’m here and they thought of me, but like I said, there is only so much I can do.

However when an email comes across my desk that just leaves me saying “Are you kidding me” or "what were they thinking”, or in the case of this email/press release with the headline “Number of People Voluntarily Walking Away from Car Lease Contract has Tripled”. The email just left me saying, I’ve heard of voluntarily walking away from your house, but a car lease. That I figured my readers would want to read about.

I mean this is first for more, I mean can understand a house considering typically a house have a good value, but a car losses some of its value once you drive it off the car dealership lot. Most cars now are worth less than the amount left on the loan or owed.

Not to mention, I would think that there is a stiff penalty for walking away from a car lease and a big black mark on your credit report. Your credit report is what gets you a mortgage, car loan, and yes even a job. Employers do look at your credit report and that could make or break you. But in this tough economy with people not only losing their jobs, but even more, long-term unemployment on the raise, I guess I see it. I mean you can’t make the car payment you can’t make it without any money.

MIAMI – (June 16, 2010) – More people are voluntarily foreclosing on their houses, but are they also voluntarily walking away from their car contracts? Online car lease website LeaseTrader.com says the number of people voluntarily walking away from their car lease contract has tripled in the last 12 months.

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.
The only thing I hate about these press releases are the person who writes them mentions one there company and/or site several times in the piece, but nobody or site else. So what do you thinking of people walking away from a car lease and/or have you ever walked away from a car lease?

Follow Racedriven.com, BrianVermette.com and myself (Brian Vermette) on Twitter.