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Auto Lease Agreement |
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Auto lease agreement is used to describe the formal contract or legal "agreement" that binds a leasing customer ("lessee") to the terms and conditions set forth by the leasing company or bank (the "lessor"). The form is usually drawn up by an auto dealer and signed by the customer before being sent to the leasing company for completion and approval. It is not final until the lease company approves it, which can often take days or even a few weeks. Meanwhile, the dealer allows the customer to drive the car during the approval period, hoping that the customer will not be turned down. Regardless of any signed contracts, a customer does not have legal possession of his car until his loan or lease has been approved and the dealer receives payment from the finance company. A lease agreement specifies the vehicle being leased, the price ("cap cost") on which the lease is based, any down payment ("cap cost reduction"), trade-in credit, length of lease in months ("term"), lease-end value ("residual"), financial costs, taxes and other fees. The agreement form also contains a government-mandated disclosure section that is standard among all lease contracts. Strangely, finance rate (interest rate) is not one of the required disclosures, although the rate can be calculated from other numbers that are disclosed. This misleads many car leasing consumers to think that leasing is a form of renting, and not financing. A lease agreement is a legal document, is binding once signed, cannot be cancelled or changed, and is enforceable. Therefore, a leasing customer should carefully read his lease contract form before signing. The Leaseguide.com Lease Kit contains a sample blank lease agreement form and contract checklist that allows you to be prepared when a dealer presents you with an actual lease contract. Since lease contract forms are fairly complicated, it is good to have read a sample contract before you visit your dealer's showroom to sign your lease. Do not sign a lease agreement that contains blank fields or inaccurate information that will be "fixed later." There is no 3-day right of recision or "grace period" for automobile purchases or leases. For more information, see: The Lease Guide
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