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Some consumers opt to lease a used car rather than a new one. Leasing a used car can be a way to get a quality vehicle at a lower monthly payment or have regular access to a reliable vehicle if your credit score prevents you from utilizing other options.

However, there are potential pitfalls that consumers should be aware of.  Used leased cars are NOT covered under the state’s Lemon Laws, meaning should something go wrong with the car, the lessee may be responsible for the cost to repair defects that arise during the lease period. Also, individuals with low credit scores may indeed find that they are approved for the lease, but will likely pay high finance charges. Some vehicles may have a starter interrupt device that the dealer might use to shut-off the engine if the consumer misses lease payments (Learn about Used Car Financing).

Here are steps that you can take to protect yourself when leasing a used car:

  • If the dealership offering the lease is also the entity that is financing the lease, make sure they are licensed through the OCABR Division of Banks.
  • Think about repairs and maintenance. Ask for service records which will show work that was already done and can help you plan when the next costly maintenance might be due.
  • Consider purchasing a service contract to cover unexpected repairs but make sure that you understand what will and won’t be covered, and make sure that those things aren’t already covered under a manufacturer’s warranty.
  • Read the paperwork carefully! Many consumers who lease used cars have reported that they thought they were purchasing the car and were surprised to find out they have to return the car at the end of the lease period. Also check for potential penalties. There may be a penalty for paying the lease early, for damage beyond normal wear and tear, or for putting more than a certain number or miles on the car.
  • If there is a problem with your used leased car, you may first want to seek mediation assistance through your local consumer group. You can contact Consumer Affairs for a list of mediation services in your area. If mediation assistance is unsuccessful, the Massachusetts Consumer Protection Law (M.G.L. c.93A) or Small Claims Court are alternatives for resolving complaints. The law requires you to send the owner or company a 30-Day Demand Letter 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.

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, data breach reporting, Home Improvement Contractor Programs and the state’s Do Not Call Registry.

 

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