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Lesson 3:
Vehicle Repairs, Sales, & Leases

 




§3.15 Vehicle Leasing—Early Termination

The lessee may terminate a lease contract at any time before the date specified in the contract. [CC §2987(a).] The following conditions apply to an early termination:

  • The lessee is liable for any unpaid lease payments that were due before the termination, as well as any other amounts that were due and unpaid at the time of termination. [CC §2987(b)(1)–(2).]

  • The lessor may charge the lessee reasonable fees for early termination, including a disposition fee and a reasonable purchase option charge if the lessee terminates and purchases the vehicle. [CC §2987(b), (c), (f).]

  • The lessor may charge the lessee the difference between the adjusted capitalized cost disclosed in the contract and the sum of (1) all depreciation amounts through the date of early termination and (2) the realized value of the vehicle. [CC §2987(b)(5); see CC §§2985.7(f) (constant yield method), 2987(c) (realized value).]

If the lessee defaults on the lease, the lessee may be liable for reconditioning, repossessing, and storing the vehicle. [CC §2987(b)(4).]

 
 
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