Chapter 5: Leasing and Lending Laws
 Before you buy or lease, make sure that you read and understand the contract before signing. It should be a precise reflection of the terms that you agreed to, and the vehicle should be exactly the one you want.
If you are buying, be aware that once you sign the sales contract, you won't be able to change your mind later – you're legally bound by all its terms and conditions. The contract can only be canceled with the dealership’s permission or if there is legal ground for it.
Truth in Lending Act
This law requires creditors to provide written disclosure of the:
- Annual Percentage Rate
- Total finance charges
- Monthly payment amount
- Payment due dates
- Total amount being financed
- Length of the credit agreement
- Charges for late payment
The Lemon Law
If your vehicle has been repaired for the same defect multiple times and the problem is still occurring, you may have a “lemon.” Lemon laws vary by state and may exceed the warranty that you have in your purchase contract. The defect must substantially hinder the vehicle’s use, value, or safety. The lemon law covers a wide range of defects including but not limited to problems with the vehicle’s:
- Engine
- Transmission
- Electrical system
- Brakes
- Steering
Federal Consumer Leasing Act
This law requires the leasing company to disclose:
- The total amount of the initial payment
- The number and amounts of monthly payments
- All fees charged
- Annual mileage allowance
- Whether the lease can be terminated early
- Whether the car can be purchased at the end of the lease
- The price to buy at the end of the lease
- Any extra payments that may be required at the end of the lease
Credit Practices Rule
The Credit Practices Rule requires creditors to provide a written notice to potential co-signers of their liability if the other person fails to pay.
Equal Credit Opportunity Act
This law prohibits discrimination related to credit because of gender, race, color, marital status, religion, national origin or age.
Resources
Some state laws may provide you with additional rights. Contact your state’s consumer protection agency or Attorney General’s office (www.naag.org).
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