Low default rates are good news for most lenders, but not for Leap Financial of San Diego.
The company, founded in 2009, said last week it is suspending operations and looking for a buyer for its existing lease portfolio.
Leap Financial bought repo cars from lenders and then leased those cars back to the same customers at a longer term and lower monthly payment -- and with a GPS-based starter-interrupter installed to insure timely payments. The lenders made more than they would have if they had auctioned off the cars.
Leap Financial CEO Tim Condon said low default rates and high used-car values had prevented the company from increasing its volumes as fast as expected.