For many people, leasing a car can be an appealing option. Car leasing agreements can be slightly different in detail, and knowing what to look out for is the key to making a good decision. It is of great benefit that leasing laws are in place to help us have the information we need regarding a car lease.
The Consumer Leasing Act (CLA) is the main form of legislation for car leases. It covers leases of four months or more in duration and leases that do not exceed $25,000 for personal use vehicles. The regulations which govern the CLA are referred to as Regulation M and were established by the Federal Reserve Board in 1998. It can be found in the Code of Federal Regulations (CFR), Title 12, Part 213.4 and lays out the disclosures that are required in leases agreements. The Code of Federal Regulations can be found in some libraries and on the Internet.
According to Encyclopedia of Everyday Law, 25 percent of all new cars that move off of dealer lots are leased. The consumer's rights are protected in regard to these car leases by the leasing agreement and the Consumer Leasing Act (CLA), as well as some state laws which might provide additional consumer rights not covered in the lease agreement. The consumer's right to information about the costs and terms of a car lease is covered under the federal CLA. This gives the clear idea of their rights and responsibilities prior to entering into a car lease agreement. In short, these car leases laws provide the consumer with the means to make more informed decisions regarding the leasing of a motor vehicle.
These leasing laws require that the consumer is informed about certain specifics in a leases. Some specifics include knowing how much money the lease is for by providing a statement of everything we have to pay--down payments, upfront costs, etc--how long it is for by listing how many payments are required and any requirements the consumer or the lessee may have--a certain type or amount of insurance. Other points covered under CLA are information about the warranty, purchase options and the agreement termination.
According to Lease Guide.com, a common misconception is that there is a 3-day "right to cancel" or
cooling off period" for automobile purchases and leases. This is not the case. This fact makes it even more important for consumers to have as much information as possible to enable them to make the best decision for them, because once they sign the contract it becomes binding.
There are certain pieces of information that are not covered under CLA regulation that we need to be mindful of like credit amounts available for trade-ins, the price of the vehicle itself and finance fees. Even though the CLA goes a long way in protecting consumer rights, information like this may be crucial in the decision-making process.
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