An Internet service called Swapalease Inc., established by the Joseph Automotive Group, which owns 18 dealerships in the Cincinnati and Dayton areas, puts together people who want out of their leases with those who need a short-term, affordable lease.

As many consumers are finding, affordable leases are getting harder to find as residual values — the projected worth of cars at lease-end, as estimated by firms such as Automotive Lease Guide (ALG) — are scaled back.

Many consumers are getting a shock when their current leases end, according to a May 11 story by Michelle Krebs in the New York Times. Monthly payments have risen subtantially as automakers and financial institutions have become more conservative in estimating residual values.

Art Spinella, president of CNW Marketing Research of Bandon, Ore., estimates that financial institutions lost $11 billion last year by setting residuals that proved to be much higher than the actual worth of vehicles returned by leaseholders.

These artificially high residual values have, in the past, made leases attractive to consumers looking for a low monthly payment. They've also allowed many consumers to lease better vehicles than they could otherwise afford.

But now, monthly lease payment increases are "worse than sticker shock ever was," according to Spinella. For example, he said that three years ago, the payment on a fully equipped Ford Explorer Eddie Bauer was about $360 a month under Ford's Red Carpet Lease plan; today, it would be around $520.

Higher residuals do not directly affect customers who buy, rather than lease, cars. But many people insist on leasing: they want a new vehicle fairly often, they don't want to tie up cash in a down payment or they can take tax deductions if they lease.

To establish a Swapalease account, the person who wants out of a lease fills out a five-step questionnaire, providing a description of the vehicle, the mileage, the months left on the lease, the monthly payment and a photo. He or she pays a one-time fee of $49.95 by credit card to list the vehicle.

A person shopping for a short-term lease on the Web site can browse by make, model, the remaining term of the lease, the monthly payment and the geographic location. A $19.95 fee includes processing of a credit application, plus information the shopper can use to contact the lease holder. Applicants must be approved by the financial institution holding the lease. If the seller or buyer do not want to communicate directly, Swapalease acts as a go-between.

When a deal is agreed upon, the two parties work with the financial institution that holds the lease to complete the paperwork, or Swapalease will handle those details. The seller pays Swapalease a $95 "success fee." Other charges, including a transfer fee for the financial institution, are negotiated between the buyer and seller. Some motivated sellers offer incentives — like payment of all fees and a month or two of lease payments — which are highlighted on the Web site with a dollar sign.

Because the old lease is replaced with a new one, the previous lessee bears no responsibility if his successor fails to make the payments or damages the vehicle.

Since the service began in Cincinnati last fall, it has listed 1,200 vehicles and closed 200 deals, according to Ronald Joseph Jr., who co- founded Swapalease with his brother, Richard, and is chief operating officer. Swapalease is now expanding in Ohio, Kentucky and Indiana and plans to spread nationwide.

For more information on Swapalease, visit www.swapalease.com.