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Some consumers opt to lease a new car rather than purchase one. For them, leasing can be a way to get access to a reliable vehicle with lower monthly payments and a lower down payment than if the car was purchased. We put together some tips about leasing a new vehicle that consumers should be aware of before signing the contract.

  • Read the lease contract carefully and be prepared to ask questions before signing.
  • Make sure you can afford both the monthly payment and the amount due at lease signing. Make sure you understand any charges and fees involved with the lease such as an acquisition fee, or documentation fee.
  • Sales tax may be charged on the down payment.
  • Verify if there are penalties or fees for paying the lease off early, making late payments, causing damage beyond normal wear and tear, or exceeding the mileage limit on the lease.
  • New leased vehicles are protected under the state’s Lemon Laws for one year or 15,000 miles of use from the date of original delivery, whichever comes first.

State law requires certain information be included in the lease documents, and explains the circumstances under which the dealer is allowed to repossess the car. Keep in mind, however, that Massachusetts is a “right to cure” state which provides the borrower some protection from repossession for a certain amount of time. Should you default on a payment, the lender must provide at least 10 days before sending a Right to Cure Notice to the borrower. This Notice then provides the consumer a 21 day period to bring the loan current. If the consumer successfully cures the loan, then servicing continues as normal. If the consumer fails to bring the loan current within the Right to Cure period, the lender may seize the vehicle used as collateral on the loan.

Consumers should also keep in mind that there is no cooling off period in Massachusetts, which means that they, as lessees do not automatically have a time frame in which to change their minds. However, they may be able to cancel the lease if the dealer did not give them a copy of the contract and they have not yet taken delivery of the vehicle.

Leasing is a great option but it’s important that consumers understand their rights and responsibilities!  If you feel that your rights have been violated, there are some options for recourse. The Lemon Law Arbitration Program, the Massachusetts Consumer Protection Act (M.G.L. c.93A) and Small Claims Court are optional resources for resolving complaints.  You may be eligible for the Arbitration Program. If you are not eligible, and believe that violations of the Consumer Protection Act occurred, you must send the owner or company a 30 Day Demand Letter under M.G.L. c. 93A, before filing a claim in court. The letter must outline your complaint, the harm you suffered, and how you want the problem resolved. It is important to note that the 30-Day Demand Letter is only viable if you are dealing with a Massachusetts-based business or merchant.

 

Consumers with complaints pertaining to a motor vehicle retail installment contract should also contact the Division of Banks. Did you lease a used car? Visit our blog for information on how to protect yourself: http://blog.mass.gov/consumer/massconsumer/used-car-leases/

If you have additional questions, contact the Office of Consumer Affairs and Business Regulation by calling our Consumer Hotline at (617) 973-8787, or toll-free in MA at (888) 283-3757, Monday through Friday, from 9 am-4:30 pm. Follow the Office on Facebook and Twitter, @Mass_Consumer. The Baker-Polito Administration’s Office of Consumer Affairs and Business Regulation along with its five agencies work together to achieve two goals: to protect and empower consumers through advocacy and education, and to ensure a fair playing field for Massachusetts businesses. The Office also oversees the state’s Lemon Laws and Arbitration Program, Data Breach reporting, Home Improvement Contractor Programs and the MA Do Not Call Registry.

 

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