Leasing or renting goods by findpdf


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									                                                                                                       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
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

                                                                                                                               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

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 publications@services.nsw.gov.au


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