Leasing laws you should know
Leasing companies must tell you all of the terms and costs of the deal they are offering you. It’s the law. The companies are bound by the Consumer Leasing Act. That law also limits how much you pay at the end of any lease and regulates the way leasing companies advertise their deals.
How much: Before you sign a lease, you must be given a detailed, written statement of everything you have to pay or may have to pay. You must also be told about any upfront money you have to pay, such as down payments, registration or security deposits.
How long: The leasing company must also tell you how many payments you have to make, how much each payment will be and when the payments are due. And the company statement must show you what all of the numbers equal — your total cost.
Requirements: The law also says you must be given details of other lease requirements. For example, if you have to take out a certain type or amount of car insurance.
Warranty: If the vehicle has a warranty, you must be told exactly what it covers and for how long. The company has to tell you who is responsible for servicing the car.
Wear-and-tear assessment: You must also be told wear and tear will be assessed when you return the vehicle and how will they decide if the wear and tear is covered by your lease or if you must pay because it is greater than you agreed to. By the way, the law also says that wear and tear standards must be reasonable.
Termination: Any terms that would let the company end the lease must also be explained. You must also be made aware under what circumstances the leasing company can demand their vehicle back or can change the terms of the deal.
Purchase option: If you opt for a lease in which you can buy the vehicle at the end of the contract, the leasing company must tell you — in writing of course — under what circumstance you can buy it and what it will cost you.
Balloon payment: If your lease has a balloon payment in it, remember that the law says it can’t be any more than the total of three regular payments, unless you agreed to pay more when you signed, or you’ve put more miles and/or wear and tear on it than you agreed to.