Auto Lease Laws
The law requires dealers to disclose certain information to you when you are thinking about leasing an automobile. Once you receive all of the information, it helps you make an informed decision regarding your decision to lease. Full disclosure keeps a dealer from charging you the full manufacturer's suggested retail price (MSRP) for a leased vehicle. Dealers also have to disclose the amount needed to pay for registration fees, taxes and license.
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Funds Needed
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When you are ready to lease a vehicle the law requires that the dealer disclose the entire amount of money you are responsible for when you are ready to sign the lease agreement. This should include how much of a down payment you need, your security deposit, the first month lease payment, as well as any fees from the bank or the dealership. Having the entire amount due helps you determine if leasing is for you.
Payments
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Dealers are also required to disclose how many payments you will be making as well as how much the payments will be. When you have this information you are able to determine exactly how much the lease will cost you over the entire contract. You can determine from this information if it is worth it to lease a vehicle. They are also required to disclose the due date for your payments.
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Residual Value
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The dealer is also required to tell you what the residual value of your vehicle will be at the end of the lease. This value is difficult to determine but a formula is applied using historical data. The residual value is used to help determine the amount of your monthly payment. If you have a high residual value at the end of the lease it means you probably had low monthly payments throughout the lease agreement. Sometimes residual values can be inflated to make leasing appear to be more attractive. When the lease is over, you have the option of purchasing the vehicle for the residual value or returning the car and leasing another.
Maintenance
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When you lease a car, one of the primary concerns is the car's maintenance. A dealer is required to explain who is required to have the maintenance done. Some contracts will call for the customer to perform certain routine maintenance checks and the dealer may be responsible for some maintenance items. This information should be clearly spelled out in the lease agreement so there is no ambiguity.
Warranty
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The dealer is also responsible for disclosing all of the terms and conditions of the warranty. Some components will be covered under the warranty and some will not be. The lease agreement will provide full disclosure of the items that are covered under the warranty.
Excessive Wear
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Some leasing companies will charge you for excessive wear and tear. They are required to provide you with the criteria used to determine what is considered excessive wear and tear.
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