Consumer Leasing During COVID
Kevin Londerholm | August 18, 2020
The Consumer Leasing Act (CLA) was passed in 1976 to assure that accurate disclosure of lease terms is provided to consumers before entering into a contract. With this information, consumers can compare one lease with another, as well as compare the cost of leasing with the cost of buying on credit or the opportunity cost of paying cash. Additionally, the CLA puts limits on balloon payments due at the end of a lease, and regulates advertising.
For consumers searching for their own transportation solution, leasing is an alternative to buying either with cash or on credit. A lease is a contract between a lessor and a lessee for the use of property subject to stated terms for a specified period and at a specified payment. Due to the residual value built into the lease, the consumer is often able to lease a newer, nicer car when compared to traditional vehicle financing.
During these times of economic uncertainty due to the COVID pandemic, our LHPH Dealers offer flexible used car leasing as an alternative to traditional vehicle financing. Watch the video below of Tom Buiteweg, Attorney at Hudson Cook, LLP, who discusses the basics of Regulation M, governing consumer leasing under the Consumer Leasing Act.
Understanding the leasing basics is the first step in developing your own Lease Here Pay Here Program. Contact us if you would like to discuss consumer leasing!