Search Results | Clear Search | Previous (in doc) | Next (in doc) | Prev Doc | Next Doc

"Point in Time" Regulation Content

Motor Dealer Act

Motor Dealer Leasing Regulation

B.C. Reg. 391/94

 Regulation BEFORE repealed by BC Reg 124/2006, effective July 1, 2006.

B.C. Reg. 391/94
O.C. 1331/94
Deposited October 28, 1994
ss. 1, 2 (1) & 3 eff. Oct. 28/94;
ss. 2 (2), 4 & 5 eff. Dec. 31/94

Motor Dealer Act

Motor Dealer Leasing Regulation

 Definitions

1  In this regulation:

"Act" means the Motor Dealer Act;

"actual fair market value" means the value of a similarly equipped motor vehicle of the same make, model and year that has been subjected to normal wear and use, as determined by an independent appraisal or as offered elsewhere in the marketplace to a member of the general public by a person registered under the Motor Dealer Act;

"consumer" means an individual who leases or agrees to lease a motor vehicle from a leasing company primarily for personal, family or household purposes;

"lease contract" means a lease or an agreement to lease where a consumer is acquiring a motor vehicle that is being leased primarily for personal, family or household purposes;

"leasing company" means a motor dealer that leases or agrees to lease a motor vehicle to a consumer or to whom a lease contract is assigned.

 Disclosure and form of lease contract

2  (1)  Every motor dealer must, in relation to a lease transaction, disclose the following information to the consumer:

(a) a complete description and identification of the motor vehicle to be leased;

(b) the retail selling price of the motor vehicle;

(c) the price on which the lease payments are based;

(d) the annualized lease rate or interest rate;

(e) a summary of costs and credits due upon signing including, as applicable, the following:

(i)  the cash down payment or capital cost reduction;

(ii)  the trade-in allowance;

(iii)  the security deposit;

(iv)  all registration and licensing fees;

(v)  all taxes and levies due upon signing;

(vi)  all advance payments required;

(vii)  administration or any other fees;

(viii)  extended warranty;

(f) the number, amount and due dates or periods of payment under the lease including the following:

(i)  the lease payment for each period in the term;

(ii)  all taxes on each periodic payment;

(iii)  all other components of each periodic payment;

(iv)  the total amount of each periodic payment;

(v)  the total amount of all periodic payments;

(g) all liabilities at the end of the lease including, if applicable, the following:

(i)  the termination liability or residual value at the end of the lease for which the consumer is liable, clearly differentiated from the termination buy out option price which applies at the consumer's discretion;

(ii)  administration fees or any other fees at the end of the lease;

(h) a description of all costs for which the consumer may be liable at the end of the lease including the following:

(i)  any requirement to pay the cost of returning the motor vehicle to as good condition as when the consumer first received it, normal wear and use excepted;

(ii)  excess kilometre charges;

(iii)  late payment penalties;

(i) the total cost of the lease transaction upon completion, including all items listed in paragraphs (e) (i) to (vii), (f) (v) and (g), but stipulating clearly that it excludes contingencies listed in paragraph (h);

(j) if there is an option to purchase,

(i)  the total transaction costs (excluding contingencies) if the consumer elects to purchase the motor vehicle, and

(ii)  the total transaction costs (excluding contingencies) if the consumer elects not to purchase the motor vehicle;

(k) if applicable, a statement of the consumer's buy out options during or at the end of the lease term, and at what price and time;

(l) a statement identifying all express warranties and guarantees made by the manufacturer or leasing company with respect to the leased motor vehicle;

(m) a statement that the motor vehicle is eligible for the implied warranties under the Sale of Goods Act;

(n) a statement of responsibility for the maintenance and servicing of the leased motor vehicle;

(o) a description of insurance provided or paid for by the leasing company, or required to be provided and paid for by the consumer, including types and amounts of coverage;

(p) a description of any limitations on the consumer's use and enjoyment of the leased motor vehicle including any restriction respecting authorized drivers or requirements for permission to take the motor vehicle outside of British Columbia;

(q) if applicable, a statement of early termination penalties, which must be described as such on the lease contract, describing the conditions under which the consumer may terminate the lease before the end of the term, and the amount or method of determining a penalty or other charges due upon such termination;

(r) a statement of the grounds for early termination of the lease by the leasing company;

(s) a statement of the leasing company policy indicating if early termination by the consumer is allowed, and if allowed the statement for early termination by the consumer must include the following:

(i)  the amount or method of determining a penalty or other charges due by the consumer upon such termination;

(ii)  the penalty or other charge for delinquency, default, late payments or any other breach of the lease contract.

(2)  Every motor dealer must ensure that the information required by subsection (1) is included in each lease contract that the motor dealer enters into with a consumer.

 Deemed provisions in a lease contract

3  The following provisions are deemed to be included in every lease contract:

(a) if the consumer's liability at the end of the lease is based, at least in part, on the estimated residual value of the motor vehicle, such estimated value must be a reasonable approximation of the anticipated actual fair market value of the motor vehicle at the end of the lease;

(b) there is a "cooling off" period of one clear day in which the motor vehicle is to remain in the possession of the leasing company. During this period, the consumer may cancel the lease contract, in which case the leasing company is required to reimburse to the consumer any deposit or other money paid to the leasing company in respect of the lease contract. In addition, the consumer is not liable to pay any charge, fee or penalty for canceling the lease contract and the period cannot be waived by the consumer;

(c) the consumer's liability as a result of any discrepancy between the estimated residual value and the actual fair market value of a motor vehicle, subject to normal wear and use, at the end of the lease is limited to a maximum allowable liability equal to the sum of 3 average monthly payments under the lease;

(d) every warranty and guarantee made by the manufacturer with respect to a leased motor vehicle and the equipment on the leased motor vehicle is assigned and conveyed to the consumer.

 Use of plain language in the contract

4  (1)  Every lease contract must be written in plain language, in not less than 8 point type, and in a manner which is easily understood by a reasonable person.

(2)  A lease contract must not use more than twice the terms "lessee", "lessor" or "assignee".

(3)  All other references to the parties must be to "consumer", "dealer" or "leasing company", or identify the parties by name, or use the terms "you" and "we" as appropriate.

 Consumer notice

5  The following consumer notice must be printed in bold 12 point type face on the front of every lease contract form:

NOTICE: It is an offence under the British Columbia Business Practices and Consumer Protection Act to misrepresent the terms of a motor vehicle lease as being a price benefit or advantage over direct purchase of the vehicle with conventional financing if such is not the case.

[am. B.C. Reg. 274/2004, Sch. 3, s. 9.]

[Provisions of the Motor Dealer Act, R.S.B.C. 1996, c. 316, relevant to the enactment of this regulation: section 38]