House Bill No. 5852
Public Act No. 00-219
An Act Concerning Leased Motor Vehicles.
Be it enacted by the Senate and House of Representatives in General Assembly convened:
Section 1. Section 1 of public act 99-278 is repealed and the following is substituted in lieu thereof:
As used in [this act] public act 99-278 and sections 1 to 4, inclusive, of this act, unless the context otherwise requires:
(1) "Motor vehicle" means a motor vehicle of the type and kind required to be registered and titled under chapter 246 of the general statutes, except a recreational vehicle, moped, motorcycle powered by a motor with a displacement of fifty cubic centimeters or less or mobile home.
(2) "Retail lessee" means a person who executes a retail lease agreement for a motor vehicle from a retail lessor.
(3) "Retail lessor" means a person who regularly engages in the business of selling or leasing motor vehicles and who offers or arranges a lease agreement for a motor vehicle, including any agents or affiliates acting on behalf of the retail lessor.
(4) "Lease agreement" means a written agreement entered into in this state [on or after July 1, 2000,] for the transfer from a retail lessor to a retail lessee of the right to possession and use of a motor vehicle primarily for personal, family or household use, in exchange for consideration for a scheduled term exceeding four months, whether or not the retail lessee has the option to purchase or otherwise become the owner of the vehicle at the expiration of the agreement. "Lease agreement" does not include an absolute sale, a sale pending approval, or a retail instalment sale.
(5) "Adjusted capitalized cost" means the capitalized cost less any capitalized cost reduction payment made by the retail lessee at the inception of the lease agreement and any net trade-in allowance granted by the retail lessor.
(6) "Irregularity" means the amount or timing interval varies by more than twenty-five per cent from the amount or timing interval most commonly specified under the lease agreement.
(7) "Ending balance" means the purchase option price at the end of the lease term.
(8) "Lease amount financed" means the adjusted capitalized cost minus:
(A) Any lease finance charge included in it; and
(B) Any advance lease payment or nonrefundable security deposit due on or before delivery of the motor vehicle.
(9) (A) "Lease finance charge" means the rent charge plus any other charge payable directly or indirectly by the retail lessee and imposed directly or indirectly by the retail lessor as an incident to, or condition of, the lease agreement.
(B) "Lease finance charge" includes:
(i) An origination or acquisition charge;
(ii) A charge for assigning, servicing or carrying the lease;
(iii) Broker fees;
(iv) A disposition or pick-up charge due on lease termination;
(v) Taxes unique to leases.
(C) "Lease finance charge" does not include:
(i) Charges of a type payable in a cash purchase, such as official fees for sales or use taxes, registration or title, or for an extended warranty or service contract;
(ii) Charges for late payment or other delinquency or default;
(iii) A refundable security deposit;
(iv) Premiums for insurance;
(v) Charges for additional authorized mileage;
(vi) An application fee charged to all applicants whether or not a lease agreement is consummated;
(vii) Fees prescribed by law that actually are or will be paid to public officials for determining the existence of or for perfecting, releasing or satisfying a security interest.
(10) "Lease rate" means the nominal annual percentage rate that reflects the amortization of the lease amount financed to the ending balance over the scheduled term of the lease, calculated according to the actuarial method of allocating base periodic payments made on an obligation between the lease finance charge and the lease amount financed, pursuant to which a payment is applied first to the accrued lease finance charge and the balance is applied to the unpaid lease amount financed.
Sec. 2. (NEW) A term in a lease agreement that attempts to exclude or modify an implied warranty of merchantability or fitness or to exclude or modify a remedy for breach of such warranties is not enforceable.
Sec. 3. (NEW) Prior to a retail lessee signing a lease agreement, with a retail lessor, the retail lessor shall make the disclosures specified in the Consumer Credit Protection Act (15 USC 1667), as amended from time to time, and Regulation M, 12 CFR Part 213, as amended from time to time, promulgated by the Board of Governors of the Federal Reserve System pursuant to said act, regardless of whether the lease agreement is subject to said act.
Sec. 4. Section 2 of public act 99-278 is amended by adding subsection (d) as follows:
(NEW) (d) The provisions of this section shall apply to lease agreements entered into on or after July 1, 2001.
Sec. 5. Section 3 of public act 99-278 is repealed and the following is substituted in lieu thereof:
(a) Every retail lessor shall disclose in the lease agreement provided to the retail lessee, in a clear and conspicuous manner, the lease amount financed, the lease finance charge, and the lease rate. [and the consumer lease disclosure required by the federal Truth-In-Lending Act and the rules promulgated pursuant to said act.]
(b) The provisions of subsection (a) of this section shall apply to lease agreements entered into on or after July 1, 2001.
Sec. 6. This act shall take effect from its passage, except that sections 1 to 3, inclusive, shall take effect October 1, 2000.
Approved June 1, 2000