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(Lease-specific terms shown in blue link to the glossary. To print these questions and answers, use the Print Materials menu.) |
Q18. Can I have my lease payments electronically sent from my bank account?
A. Most lessors will welcome electronic payments.
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Q19. If I get transferred to another state, can I take my vehicle with me?
A. Some lessors, particularly those operating regionally, prohibit lessees from permanently moving the leased vehicle to another state. In most lease agreements, if you have the right to move out of state, you must notify the lessor that you have moved and be sure that the vehicle is properly titled and registered in the new state and all taxes are paid. If you move, you should be aware that a new state might tax your vehicle and your lease in a different manner. Some states collect certain taxes at the beginning of the lease while other states collect these taxes during the term of the lease.
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Q20. Can I take my vehicle to another country?
A. Most lessors restrict your right to take the vehicle out of the country. However, there may be exceptions for vacation use to visit certain countries. Please refer to your lease agreement.
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Q21. Can I terminate my lease early?
A. Virtually all leases permit you to terminate your lease early as described in your lease agreement. However, you may have to pay a substantial charge if you want to return the vehicle because most vehicles depreciate faster than the actual depreciation paid during the early stages of a lease. For specific requirements, see your lease agreement.
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Q22. How are early termination charges calculated?
A. If you return the vehicle at early termination, the charge is generally the difference between the early termination payoff and the amount credited to you for the vehicle after its sale in the wholesale market. The early termination payoff is the total amount you owe under the lease agreement at the time of termination before subtracting the value credited to you for the vehicle. The early termination payoff includes the unpaid lease balance.
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Q23. What happens if my vehicle is stolen or totaled in an accident?
A. Generally, this is an early termination of the lease (although some leases allow the lessor to substitute a similar vehicle to complete the original lease). Some leases include "gap coverage" at no additional charge that covers some or all of the "gap amount" that you may owe at early termination after a casualty loss. The gap amount is the difference between the early termination payoff and the amount for which the vehicle is insured. The difference is primarily due to the insurance settlement being based on the wholesale value of the vehicle. The gap amount does not include any past due amounts you owe or other fees such as late charges assessed to your account, your insurance deductible or any other policy deductions. If your lease does not include gap coverage (without an additional charge), you can generally purchase gap coverage from the lessor or another third party at the beginning of the lease.
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Q24. What happens to my lease if I become disabled and no longer want the vehicle?
A. Your lease remains in effect. Talk with your lessor to see what your options are for early termination or subleasing.
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Q25. What happens if I die during the lease term?
A. Generally your lease will terminate early with your estate held responsible for any early termination charge. Some lessors may allow your spouse or another party to assume the lease.
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Q26. Is it possible to transfer my lease to another party
who is not on the lease?
A. Lessors have a variety of different policies concerning lease transfers (called "subleasing"). Generally, if the lessor permits subleasing, the sublessee will have to meet the same credit standards that you met. You will remain responsible for the performance of the lease terms including all payments, so it is important to find a fully responsible person in this situation to take over your lease. In some states, it is illegal to sublease vehicles without the explicit written consent of the lessor. If the lessor does not agree to a sublease, then you cannot transfer the lease.
Some businesses charge a fee to find someone to assume the lease. They may or may not be able to find a suitable consumer. These "subleasing" companies may advise you not to inform the lessor "so they can't turn you down." However, you will risk the vehicle being given to an unqualified party. In addition, there have been numerous cases in which both the vehicle and the subleasing company disappeared, leaving the lessee responsible for the missing vehicle and the payoff on the lease. You should check with your local consumer protection agency and your lessor about any subleasing company you are considering.
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Q27. If I have temporary financial difficulties, what can be done? Can I extend my lease beyond the lease term for a month or two?
A. Lessors have a variety of different policies concerning lessee financial problems. Some lessors allow you to skip a payment or extend the lease. The lease depreciation and monthly payment may be increased or a fee charged because the vehicle will be older and will have more mileage, which will increase the lease depreciation. If different arrangements are made, ask to get the terms in writing.
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Q28. Who is responsible for paying for maintenance?
A. Lease agreements generally require you to follow all manufacturer maintenance requirements. Typically, you pay separately for vehicle maintenance.
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Q29. What do I do if I receive notification of a recall on my leased vehicle?
A. Most leases require you to have the repair made by the manufacturer's representative, normally the dealer. If you don't respond to the recall, it may affect your warranty coverage or the excess wear and tear charges at the end of the lease, or be treated as a default.
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Q30. How do I renew the registration for the vehicle?
A. You usually must pay for all annual state and local government fees required to register the leased vehicle and operate it. Either the state or the lessor will mail you the registration renewal application just as if you owned the vehicle. You then renew the registration for the vehicle in the usual way.
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Q31. Am I developing equity in my leased vehicle?
A. In most cases you are not. However, if the market value of the vehicle is more than the residual value stated in your lease (i.e., the actual depreciation was less than the depreciation shown in your lease), there is equity in the vehicle. However, you don't receive this equity in the vehicle if you return it at the end of the lease. You can acquire this equity in two ways:
- Exercise your purchase option.
- Transfer your purchase option to a dealer or other third party you choose for a fee.
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Q32. What do I do if I have a problem with my lease? Who can I turn to?
A. Your first step should be to talk with the dealership or leasing company directly. If you still have a problem, your next step would be to talk with staff in your state's Division of Motor Vehicles or your state's Attorney General's office. The
federal Consumer
Leasing Act and some state laws may provide you with additional consumer rights not covered in your lease agreement. For information on these laws, contact your state's consumer protection agency or Attorney General's office. If your lessor is a bank, you can contact the bank's regulator. If your lessor is not a bank (for example, if it is a captive finance company or an independent leasing firm), you can contact the Federal
Trade Commission. You also have the right to hire an attorney.
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