What is a consumer lease?

A consumer lease is a contract between you (the lessee) and the hirer (the lessor) which allows you to pay to use an item (most commonly whitegoods such as fridges and washing machines) for a certain amount of time rather than buying it outright. The item remains the property of the lessor.

Two things to remember:

Consumer leases can be VERY expensive

Often, the total of the lease payments add up to more than the cash price of the goods. There are often also other fees and charges included in the agreement.

A consumer lease is a contract

Consumer lease agreements are contracts. There is no ‘cooling off’ period for consumer leases which means that by entering into a consumer lease, you create legally enforceable obligations on yourself straight away. Make sure you read the contract carefully. If you’re not 100% sure what you’re agreeing to or you’re not sure whether it’s a good idea, seek legal advice before you sign it.

Rights of a Lessee

There is no right to purchase the goods. At the end of the lease you may make an offer to buy the goods but the lessor may refuse to sell the goods to you
You may request a financial hardship variation to your contract if you are unable to meet repayments¹
The lessor must respond to your request in writing within 21 days
If they unreasonably refuse your request, you may complain to the Australian Financial Complaints Authority (AFCA)

Repossession and Termination

If you fail to make repayments the lessor must give you 30 days written notice of their intention to take possession of leased goods.¹

This notice however is not required when:

The lease has ended
The lessor reasonably believes you have disposed or intend to dispose of the goods, which includes selling the goods to someone else
The lessor is unable to locate you
You are insolvent¹

If you signed a consumer lease and have not received the goods, you may terminate the lease. You may still be liable for fees/charges incurred before the termination.¹

A consumer can terminate the lease provided they return back the goods and pay the amount outstanding under the lease.¹

1. For more information, click here for our Consumer leases fact sheet

Case Study

Four years ago Jessica got a new couch. She entered into a consumer lease to pay for it. The lease has now ended and she has been contacted by the leasing business to return the couch. Jessica knows that over the last four years she has paid the business much more than the couch was worth and wants to know whether she can keep it.

She calls CCLSWA for advice. She is advised that at the end of the consumer lease she does not own the couch. She can make an offer to purchase it, but she has no right to purchase or keep it.

Information on our website is provided for information only and is not legal advice. If you would like legal advice, please message us using the form below for a confidential discussion, or scroll down to see other ways to reach us.

If you require advice in relation to a consumer lease, please message us using the form below for a confidential discussion, or scroll down to see other ways to reach us.