1. AUTOMOBILE LEASES - INTRODUCTION - MORE COMPLICATED THAN AUTO LOANS

Auto leases are more complicated than Auto Loans. Therefore California enacted the "Vehicle Leasing Act" in order to provide auto leasing protection similiar to those that California's Rees-Levering Automobile Sales Finance Act provides to car buyers.

The Vehicle Leasing Act governs what MUST disclosed to a buyer, PROHIBITS the imposition of certain terms, and requires ALL terms of the contract to be included in a SINGLE document. The Vehicle Leasing Act covers all auto leases except those which can be considered "rent to own"; where the lessee has paid the equivalent value of the vehicle by the time the lease period is over.

Auto Leases on the surface appear to be a simple proposition; you are just agreeing to a long-term car rental. However because auto lease payments are part "rent" and part "depreciation" auto leasing becomes more complicated than vehicle financing.

As a result our emphasis will be on how your auto lease payment is calculated and how "early termination" auto lease costs are calculated. Move you MOUSE over the image to the left. Your mouse will show important areas of a lease agreement. Then click to see actual size. (Or just click here to see a sample AUTO LEASE)