429.203(6)(a)(a) Any motor vehicle insurance policy covering the leased vehicle for which a charge is included in the consumer lease shall be issued by an insurer authorized to transact business in this state.
429.203(6)(b)1.1. The lessor shall advise the lessee in writing at the time the lease is entered into that the lessee has the right to do any of the following:
429.203(6)(b)1.a.
a. Purchase a motor vehicle insurance policy covering the loss of or damage to the leased vehicle and liability arising out of the ownership, maintenance or use of the leased vehicle from any insurer authorized to issue motor vehicle insurance policies in this state and through any agent currently licensed under
ch. 628.
429.203(6)(b)1.b.
b. Substitute for an existing motor vehicle insurance policy any other policy with similar coverage issued by any other insurer or sold by any other agent meeting the qualifications specified in
subd. 1. a. at any time during the lease term.
429.203(6)(b)2.
2. If the lessee purchases a motor vehicle insurance policy under
subd. 1., the lessor may agree to pay the premiums and to amortize the cost of the premiums over the lease term, or over such portion of the lease term as the parties may agree.
429.203(6)(b)3.
3. If the lessee provides to the lessor satisfactory proof that the lessee has purchased a motor vehicle insurance policy that includes the coverages and limits required by the lease, the lessor may not charge the lessee for insurance covering the leased vehicle except as the parties have agreed under
subd. 2.
429.203(6)(b)4.
4. The lessor may require the lessee to have the lessor included on the policy as an additional insured and loss payee and to provide the lessor with a copy of the policy.
429.203(6)(c)
(c) If the lessee does not purchase, maintain in force and provide satisfactory proof of insurance against loss of or damage to the leased vehicle and against liability arising out of the ownership, maintenance or use of the leased vehicle, the lessor may purchase motor vehicle insurance to protect the lessor's interest in the leased vehicle and against the lessor's liability arising out of the ownership, maintenance or use of the leased vehicle. The lessor may include the cost of such insurance in the rent charge.
429.203(7)
(7) A holder may purchase or sell, or otherwise acquire or transfer, an interest in a consumer lease or a motor vehicle subject to a consumer lease, on such terms and conditions as may be mutually agreed upon by the parties to the sale, transfer or acquisition. No filing of the sale, transfer or acquisition, or any requirement that the holder be deprived of any payments due with respect to the consumer lease or, if subject to replevin or otherwise returned to the holder, the motor vehicle, shall be necessary to the validity of any written bill of sale or other instrument of transfer of the interest in a consumer lease as against creditors, subsequent purchasers, pledges, encumbrancers, mortgagees, successors or assigns.
429.203(8)(a)(a) Upon written request from a lessee, the holder shall give or forward to the lessee a written statement that specifies, without regard to realized value, the projected obligation that the lessee will incur in the event of early termination of the consumer lease.
429.203(8)(b)
(b) No charge may be imposed for the preparation of one statement under
par. (a) in a 12-month period. A holder may impose a reasonable charge, not exceeding $20 per statement, for the preparation of a 2nd or subsequent statement under
par. (a) in a 12-month period, if the charge has been disclosed to the lessee either orally or in writing prior to preparation of a statement under this paragraph.
429.203(9)
(9) A holder is not required to pay interest on any security deposit under the consumer lease.
429.203(10)
(10) Any provision of a consumer lease in violation of this chapter is void and unenforceable, but shall not affect the validity of any other provision of the consumer lease.
429.203 History
History: 1995 a. 329;
1997 a. 48.
429.204
429.204
Gap amount; notice; waiver. 429.204(1)
(1) If a consumer lease provides that the lessee is responsible for any or all of the gap amount, the consumer lease shall conspicuously disclose this fact, using the term "gap amount". The acceptance of a consumer lease may not be conditioned upon the lessee's agreement to gap protection.
429.204(2)
(2) A lessor may waive any right under the consumer lease to hold a lessee liable for any or all of the gap amount. The consumer lease may contain a separate charge for the waiver under this subsection if the charge is conspicuously disclosed to the lessee, and the consumer lease also contains a conspicuous notice stating that, for such separate charge, the lessor agrees to waive such contractual right and that, in lieu of such separate charge, the lessee may purchase insurance from an insurer authorized to transact business in this state insuring the lessee for any or all of the gap amount. A waiver under this subsection without a separate charge may not be considered insurance on property.
429.204(3)
(3) A lessor's waiver under
sub. (2) may be conditioned upon payment of any of the following:
429.204(3)(b)
(b) All amounts due under the consumer lease as of the date of total loss or destruction of the leased vehicle or, if specified in the consumer lease, as of the date of receipt by the lessor of insurance proceeds.
429.204(3)(c)
(c) An amount from the lessee equal to any deductible amount under an applicable insurance policy and any other subtractions made by the insurance company under the insurance policy.
429.204(3)(d)
(d) Insurance proceeds from the applicable insurance policy required under the consumer lease or the equivalent amount with respect to the value of the motor vehicle.
429.204 History
History: 1995 a. 329.
429.205(1)(1) No consumer lease, or any other document executed by a lessee in connection with a consumer lease, shall create a security interest in any real or personal property of the lessee to secure payment of any obligations assumed by the lessee under the consumer lease. This subsection does not apply to any of the following:
429.205(1)(a)
(a) The taking of a security deposit, advance lease payment or other prepayment by cash, check, credit card or other device.
429.205(1)(c)
(c) Any security interest in the leased vehicle or in any proceeds, refunds for cancellation or any other rights of the lessee with respect to the consumer lease or the leased vehicle, including any insurance contracts, gap protection contracts, repair contracts and extended warranty or maintenance service contracts.
429.205(2)
(2) Any security interest taken in violation of this section is void and unenforceable, but shall not otherwise affect the validity of the consumer lease.
429.205 History
History: 1995 a. 329.
429.206
429.206
Determination of realized value upon early termination. If a consumer lease is terminated before the expiration date set forth in the lease, the realized value of the motor vehicle leased under the consumer lease shall be determined as follows:
429.206(1)
(1) If the lessee and the lessor mutually agree upon the motor vehicle's realized value, the realized value is the mutually agreed-upon amount.
429.206(2)
(2) If there is a total loss or destruction of the vehicle occasioned by its theft, physical damage or other occurrence specified in the consumer lease and no amount is agreed upon under
sub. (1), the realized value equals the sum of any insurance proceeds received by the holder under an applicable insurance policy required under the consumer lease and any amounts received by the holder from any other party in payment for the loss or destruction of the leased vehicle.
429.206(3)
(3) If the realized value has not been determined under
sub. (1) or
(2) and an appraisal is obtained under this subsection, the realized value is the amount established by the appraisal. An appraisal may be obtained under this subsection if, within 7 business days of the early termination of the consumer lease, a lessee who is not in default obtains at his or her own expense a professional appraisal of the current wholesale value of the vehicle by an appraiser agreed to by the holder, with such agreement not to be unreasonably withheld by the holder. An appraisal under this subsection is final and binding and establishes the realized value for purposes of determining the liability of the lessee under the consumer lease.
429.206(4)
(4) If the realized value has not been determined under
sub. (1),
(2) or
(3), the realized value equals the greater of the following:
429.206(4)(a)
(a) The price obtained by the holder for the commercially reasonable disposition of the motor vehicle, after subtracting all actual and reasonable expenses incurred by the lessor in connection with the disposition of the vehicle.
429.206(4)(b)
(b) The highest bona fide offer received by the holder for the commercially reasonable disposition of the motor vehicle.
429.206 History
History: 1995 a. 329.
429.207
429.207
Restrictions on early termination obligation. 429.207(1)(1) The lessee has the right to terminate the consumer lease at any time.
429.207(2)
(2) If a consumer lease is terminated before the expiration date set forth in the consumer lease and no applicable option to purchase is exercised by the lessee, the early termination obligation of the lessee may not exceed an amount equal to the sum of the following amounts:
429.207(2)(a)
(a) Any unpaid lease payments that have accrued as of the date of termination of the consumer lease.
429.207(2)(b)
(b) Any other amounts unpaid by the lessee, other than excess mileage charges, arising under the terms of the consumer lease or not prohibited by this chapter or
chs. 421 to
427.
429.207(2)(c)
(c) Any official fees and taxes imposed in connection with termination of the consumer lease.
429.207(2)(d)
(d) The amount set forth in the consumer lease as a disposition or other early termination fee, not to exceed the average payment allocable to a monthly period under the consumer lease.
429.207(2)(e)
(e) The reasonable costs of retaking, storing, preparing for sale and selling the motor vehicle, except that a cost may not be imposed under this paragraph if, in the event of a default, the cost could not be charged under
s. 422.413.
429.207(2)(f)
(f) Any positive amount determined by subtracting the realized value from any of the following:
429.207(2)(f)1.
1. The sum of the balance subject to a rent charge and the rent charge earned in advance for the computational period in which the early termination occurs, calculated in accordance with the constant yield method or any other generally accepted accounting principle.
429.207(2)(f)2.
2. An amount determined in accordance with generally accepted actuarial principles under which the rent charge is calculated on the adjusted capitalized cost for the time outstanding.
429.207(3)
(3) A holder may credit against the balance of the lessee's early termination obligation any refundable security deposit or advance lease payments held by the holder. The excess of any refundable security deposit or advance lease payment over the amount of the lessee's early termination obligation shall be promptly returned to the lessee.
429.207(4)
(4) This section does not limit or restrict the manner of calculating the lessee's early termination obligation, if such obligation does not exceed the amount calculated under
sub. (2). Such manner may include calculation of the unamortized capitalized cost, or the discounted present value of remaining lease payments, multiples of monthly lease payments or payments on another periodic basis.
429.207 History
History: 1995 a. 329;
1997 a. 48.
429.208
429.208
Assessment of excess wear and damage. 429.208(1)(a)(a) Except as provided in
par. (b), a holder shall, upon return of a leased vehicle, conduct an inspection to determine excess wear and damage to the leased vehicle for which the lessee may be held liable. A holder may not prohibit the lessee from being present at such inspection.
429.208(1)(b)
(b) If a lessee exercises an option to purchase in the consumer lease, the holder may not demand, collect or receive a charge for excess wear and damage to the leased vehicle and is not required to conduct the inspection under
par. (a).
429.208(2)
(2) For any inspection at or after the return of a leased vehicle, a holder shall do all of the following not later than 50 days after return of the vehicle:
429.208(2)(b)
(b) Provide to the lessee an itemized bill meeting the requirements under
sub. (3).
429.208(2)(c)
(c) Provide to the lessee a statement in substantially the following language: "You are being asked to pay this amount for excess wear and damage to the leased vehicle. If you do not agree with this amount and wish to preserve valuable rights, you must obtain and deliver to us, within 7 days after hand delivery or 9 days after mailing of this bill, an itemized inspection report and estimate of the cost of repairing such excess wear and damage from an appraiser agreed to by us and, if your lease has ended, payment of any charges due under the inspection you obtained. If you properly obtain and deliver such appraisal and tender any amounts due, such appraisal shall be binding on the holder. If you fail to do so, the holder's inspection shall be conclusive."
429.208(2)(d)
(d) For the purpose of obtaining a counter-inspection under
sub. (5), allow the lessee access to the motor vehicle, at a reasonable time and place designated by the holder, for the applicable time period specified in the statement under
par. (c). A holder is not required to deliver the motor vehicle to, or produce the motor vehicle at, a place designated by the lessee for the purpose of the counter-inspection.
429.208(3)(a)(a) The itemized bill specified in
sub. (2) (b) shall be based on the inspection for excess wear and damage to the leased vehicle, and shall consist of a listing of items of excess wear and damage, together with a charge for each item. The itemized bill may be comprised of separate documents delivered or mailed separately, and may include identified charges for other amounts due under the consumer lease, such as excess mileage charges. Acknowledgement of receipt of an itemized bill by a lessee is not an admission by the lessee of the existence, nature, obligation to pay or amount of any item of excess wear and damage specified in an itemized bill.
429.208(3)(b)
(b) A holder is not required to provide to the lessee an itemized bill under
sub. (2) with respect to a counter-inspection under
sub. (5).
429.208(4)(a)(a) If a lessee is required under the consumer lease, or given the option by the lessor, to have a pretermination inspection by the holder of the leased vehicle for excess wear and damage, the holder shall provide at least 15 days' notice of such inspection to the lessee. A pretermination inspection under this paragraph may not be earlier than 15 days before the termination date set forth in the consumer lease. The notice under this paragraph shall specify that the holder's inspection after the termination of the lease shall be conclusive unless the lessee obtains a counter-inspection under
sub. (5).
429.208(4)(b)
(b) A pretermination inspection under
par. (a) shall be reasonable as to time and place. In addition to the statement under
sub. (2) (c), any itemized bill of excess wear and damage prepared under
par. (a) shall include a statement in substantially the following language: "If this inspection report was prepared prior to the termination date of the consumer lease, you may avoid any excess wear and damage charges by having such items satisfactorily repaired prior to the return of the vehicle. The holder may inspect the vehicle at or after its return and may seek additional charges for excess wear and damage only by written notice to you, and only for excess wear and damage incurred after the date of that inspection. Any charges for excess wear and damage under this inspection or your own inspection shall be due when the lease terminates."
429.208(5)(a)(a) A lessee may, at his or her own expense, obtain a counter-inspection for excess wear and damage to the leased vehicle, within the applicable time period specified in the statement under
sub. (2) (c). A counter-inspection is not valid under this section unless it satisfies all of the following requirements:
429.208(5)(a)1.
1. Is conducted by an inspector agreed to by the holder, with such agreement not to be unreasonably withheld by the holder.
429.208(5)(a)2.
2. Is in writing in a form provided by, or acceptable to, the holder, listing any items of excess wear and damage to the leased vehicle and, according to standards set forth in the consumer lease, the estimated cost of repair of such items.
429.208(5)(a)3.
3. Is delivered to the holder within the applicable time period.
429.208(5)(a)4.
4. If conducted after the leased vehicle is returned to the lessee, is accompanied by payment of the amount of such excess wear and damage charges listed on the counter-inspection.
429.208(5)(b)
(b) Absent a mathematical mistake or other obvious error, a holder shall accept the counter-inspection as conclusive of the lessee's excess wear and damage obligations under the consumer lease.
429.208(5)(c)
(c) The total amount of the excess wear and damage charges specified in a counter-inspection under
par. (a) may not be increased at or after the termination of the lease, except to increase the lessee's excess wear and damage obligation to the extent that any excess wear and damage was obscured or concealed or is reasonably believed by the holder to have occurred after such inspection. Any increase under this paragraph is not valid unless the holder gives the lessee another itemized bill and statement meeting the requirements of
subs. (2) and
(3).
429.208(6)
(6) A lessee shall not be in default on the consumer lease for failing to obtain a pretermination inspection or counter-inspection under this section, notwithstanding any contrary provision of the consumer lease. If a lessee does not obtain a pretermination inspection or counter-inspection, the itemized bill with respect to the inspection under
sub. (1) shall be conclusive.
429.208(7)(a)(a) A holder may not demand, receive or collect a charge for excess wear and damage to the leased vehicle unless the holder substantially complies with this section. The exclusive penalty for failure to substantially comply with this section is a waiver of the right to collect all contested excess wear and damage charges from the lessee.
429.208(7)(b)
(b) A holder is not required to send any notice under this section if the holder does not wish to demand, receive or collect any excess wear and damage charges.
429.208(7)(c)
(c) Nothing in this section shall limit a lessee's obligation for excess mileage charges or prohibit any agreement between the lessee and the holder relating to excess wear and damage, if the agreement does not conflict with any of the lessee's rights under this section, or limit a lessee's liability to the holder for odometer tampering or for obscured or concealed structural or safety-related damage discovered by the holder after the return of the motor vehicle or the receipt of an itemized bill by the lessee.
429.208(8)
(8) Except for
sub. (1) (b), this section applies only to leased vehicles that are returned to an authorized representative, who is located in this state, of the holder.
429.208 History
History: 1995 a. 329.
429.209
429.209
Renegotiations and extensions. 429.209(1)
(1) All of the disclosure requirements specified in
s. 429.203 apply to the renegotiation of a consumer lease. A renegotiation of a consumer lease does not create a warranty or subject the transaction to any laws of this state relating to the sale of used motor vehicles.
429.209(2)
(2) The disclosure requirements specified in
s. 429.203 do not apply to any extension of a consumer lease not exceeding 6 months in the aggregate.
429.209 History
History: 1995 a. 329.
