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Consumers are often confused about their rights and. obligations when ... surprised to discover that they don't own the goods at the. end of the lease and may not ...
January 2010 Leasing or renting goods Many stores allow you to lease or rent electrical No warranty appliances, computers and household goods. There is no warranty on the goods other than the basic Leasing goods is often marketed as a cheaper option to statutory or implied warranties. buying them. However, it can end up being a lot more expensive. Fair Trading's advice Consumers are often confused about their rights and Although there are many different types of consumer obligations when leasing goods. Some consumers are leases available, Fair Trading does not recommend surprised to discover that they don’t own the goods at the leasing unless you have done your homework and know end of the lease and may not have the right to buy them. what you are getting into. Lease agreements are not usually covered by the stricter Don’t be pressured. Shop around. Do your calculations regulation of loans and consumers should be aware of and compare with other options such as paying in cash their major pitfalls. once you have saved the money or getting a personal loan. Things you need to know about leasing IMPORTANT - Read all the rental documents very carefully and get independent advice if you don’t It’s expensive understand something before signing the lease Lease payments may add up to more than what the agreement. goods would usually cost to buy. You may also have to pay fees and charges during the lease or before the When things go wrong goods are delivered to you. These fees can include stamp duty, late payment fees and service charges. If you have a problem or dispute with a trader or finance company contact Fair Trading on 13 32 20 to find out You don’t own the goods your options or go to the Resolving issues page on the Despite paying a large amount of money to lease the Fair Trading website to lodge a complaint. goods, much more than the cash price to buy them, you don’t own the goods unless you are able to buy them at An example of a lease agreement the end of the lease. Kim leases a fridge for $65 per month over 36 months. At the end of the lease period she has paid $2,340 in lease No cooling‑off period, heavy contract terms payments (not taking into account the fees and charges and high exit fees that may apply). This is a lot more compared to the retail There is usually no cooling‑off period on lease price of the fridge of $1,000. Kim has paid more than agreements and no matter what happens, even if the double the original price. goods are stolen, damaged or destroyed you will still need to make the lease payments. You may also have At the end of the lease contract Kim has a few options to buy insurance. Some companies will lock you into a (depending on the contract): contract and if you want to get out of the contract early ● return the fridge (in good condition) and stop making you will have to pay all the remaining lease payments repayments anyway. ● offer to buy the fridge for an agreed amount www.fairtrading.nsw.gov.au January 2010 ● continue paying the agreed amount and keep using the fridge ● upgrade to a newer model and renew the contract under new conditions. Case study David was shopping for a new laptop and the salesperson assured him that a ‘flexible’ renting agreement was the best option. David was told that under the rental agreement he would not pay more than the computer price and would be able to upgrade the laptop without commencing a new agreement and would own the laptop at the end of the agreement. It sounded like a good deal and David signed the papers. Three weeks after David received the laptop the network card in it failed and David was advised it would take 8 weeks to repair it. The store finally agreed to give David another computer to use while his was being fixed. At the same time David found out that the laptop would cost him $3,600 instead of the retail price of $1,599 and that he would not own the computer at the end of the agreement. David decided to contact Fair Trading for help. However, there was not much that the Fair Trading customer service officer could do as David had signed the contract and was bound by its terms and conditions. Fair Trading strongly advises consumers to read the full contract, including the small print before signing anything. In some instances Fair Trading is able to negotiate the cancellation of a leasing contract but it depends on the case. www.fairtrading.nsw.gov.au This fact sheet must not be relied © State of New South Wales through NSW Fair Trading Fair Trading enquiries 13 32 20 on as legal advice. For more You may freely copy, distribute, display or download this information with TTY 1300 723 404 information about this topic, refer to some important restrictions. See NSW Fair Trading's copyright policy at Language assistance 13 14 50 the appropriate legislation. www.fairtrading.nsw.gov.au or email email@example.com www.fairtrading.nsw.gov.au
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