Chapter 429

429.104(13g) (13g) “Gap insurance” means insurance coverage, offered by an insurer authorized to transact business in this state, that provides that another person is liable for the gap amount.

429.104(13k) (13k) “Gap waiver” means a provision in a consumer lease offered or sold pursuant to the terms of s. 218.0148.

429.104(13m) (13m) “Gross capitalized cost” means the sum of all amounts capitalized in the consumer lease that, after subtracting the capitalized cost reduction, amortizes to the residual value by the depreciation portion of the periodic lease payments over the scheduled term of the lease or, for a single-payment lease, the single payment. These amounts may include taxes; fees for registration, license, acquisition, administration and assignment; other fees; charges for insurance, service contracts and extended warranties; and charges for accessories and their installation, for other services and benefits incidental to the consumer lease, and for delivering, servicing, repairing or improving the vehicle. With respect to a vehicle or other property traded in connection with a consumer lease, the term may include the outstanding unpaid balance of the amount financed under a consumer loan, as defined in s. 421.301 (12), or a retail installment contract, as defined in s. 218.0101 (32), or the unpaid balance of any early termination costs under a lease or other obligation of the lessee. The term does not include any rent charge.

429.104(14) (14) “Group credit insurance” means group credit life insurance, group credit accident insurance, group credit accident and health insurance, group disability insurance or group credit unemployment insurance.

429.104(15) (15) “Holder” means, with respect to a consumer lease, the lessor and, upon assignment of the lease, the assignee for the period of assignment. The term does not include a pledgee of a consumer lease or the owner or beneficiary of an interest in a trust that owns consumer leases.

429.104(17) (17) “Lessee” means a natural person who leases a motor vehicle from a lessor under a consumer lease.

429.104(18) (18) “Lessor” means a person regularly engaged in the business of leasing or selling vehicles who leases a motor vehicle to a lessee under a consumer lease.

429.104(19) (19) “Motor vehicle” has the meaning given in s. 218.0101 (22).

429.104(20) (20) “Periodic” means weekly, monthly, quarterly or any other period of time specified in a consumer lease.

429.104(21) (21) “Prospective lessee” means a natural person who enters into a prelease agreement under s. 218.0144 with a prospective lessor, or who otherwise intends to become a lessee.

429.104(21m) (21m) “Prospective lessor” means a person regularly engaged in the business of leasing or selling vehicles who enters into a prelease agreement under s. 218.0144 with a prospective lessee, or who otherwise intends to become a lessor.

429.104(22) (22) “Realized value” means, with respect to any motor vehicle leased under a consumer lease that is terminated before the expiration date, the value determined under s. 429.206.

429.104(23) (23) “Renegotiation” means the satisfaction and replacement of an existing consumer lease by a new consumer lease between the same parties, including an assignee of the lessor. The term does not include a deferral or extension of any periodic lease payments or portions thereof not exceeding 6 months in the aggregate, a satisfaction and replacement of a consumer lease involving a court proceeding or the settlement of a dispute, or any other action that does not constitute a renegotiation under the federal consumer leasing act.

429.104(23m) (23m) “Rent charge” means the sum of all charges payable by the lessee for the privilege of making the scheduled lease payments under a consumer lease. The term does not include gross capitalized cost.

429.104(24) (24) “Residual value” means the estimated value of the leased vehicle at the expiration of the lease term that is used in the consumer lease to determine the depreciation portion of the base periodic payment.

429.104(25) (25) “Single-payment lease” means a consumer lease that requires only one payment, to be paid at the time of consummation of the lease.

429.104(26) (26) “Total lease obligation” means the sum of all of the following:

429.104(26)(a) (a) All scheduled periodic payments under the lease.

429.104(26)(b) (b) Capitalized cost reduction.

429.104 History History: 1995 a. 329; 1997 a. 48; 1999 a. 31; 2017 a. 161.

subch. II of ch. 429 SUBCHAPTER II

DISCLOSURES; LIMITATIONS ON AGREEMENTS
AND PRACTICES

429.201 429.201 Prelease availability of consumer lease form. A lessor shall, upon request of a prospective lessee, make readily available a blank sample of its current consumer lease form for examination by the prospective lessee before execution of the consumer lease.

429.201 History History: 1995 a. 329.

429.202 429.202 Advance payment or trade-in; refund or return.

429.202(1) (1) If a prospective lessee has made an advance payment or surrendered possession of a vehicle to a prospective lessor as a trade-in pending the execution of a consumer lease, the prospective lessee shall have the right, if the application for the consumer lease is not approved, to receive a prompt refund of the advance payment and, if applicable, to have the trade-in vehicle promptly returned. If a prospective lessor takes possession of a trade-in vehicle under this subsection, the prospective lessor may not sell, offer for sale, lease, transfer or otherwise dispose of the vehicle in any manner until execution of the consumer lease or, except for return of the vehicle to the prospective lessee, disapproval of the consumer lease application.

429.202(2) (2) This section does not apply to the sale of a vehicle by a prospective lessee to a prospective lessor under a separate contract of sale if the contract of sale is executed prior to execution of the consumer lease between the parties, gives the date of sale and is signed by both parties. Any contract of sale under this subsection shall provide for all of the following:

429.202(2)(a) (a) That the contract price establishes the value of the vehicle to be credited against the amount due from the lessee at the consummation of the lease or, if the parties fail to execute a consumer lease, the amount due the prospective lessee for the vehicle.

429.202(2)(b) (b) That the prospective lessee agrees to leave the contract price on deposit with the prospective lessor pending the execution of a consumer lease between the parties with respect to a motor vehicle to be ordered from a manufacturer, including a motor vehicle not yet in production as of the date of sale.

429.202(2)(c) (c) That the prospective lessee shall be entitled to payment of the contract price from the prospective lessor no later than 75 days after the date of sale, unless the parties have executed a consumer lease or the prospective lessee has already received such payment.

429.202 History History: 1995 a. 329.

429.203 429.203 Requirements of a consumer lease.

429.203(1) (1) A consumer lease shall be in writing and signed by the lessor and the lessee.

429.203(2) (2) Except as otherwise provided in this subsection, the printed portion of a consumer lease, other than instructions for its completion, shall be in at least 8-point type. The consumer lease shall contain all of the following printed in a conspicuous manner:

429.203(2)(a) (a) At the top of the consumer lease, the words “MOTOR VEHICLE LEASE AGREEMENT” in at least 10-point type.

429.203(2)(b) (b)

429.203(2)(b)1. 1. Except as provided in subd. 2., if no liability insurance for bodily injury or property damage is provided for under the consumer lease, a notice in substantially the following language in bold-faced capital letters of not less than 10-point type: “NO LIABILITY INSURANCE FOR BODILY INJURY OR PROPERTY DAMAGE IS INCLUDED IN THIS LEASE.”

429.203(2)(b)2. 2. The notice required under subd. 1. may be provided on a separate document delivered to the prospective lessee not later than the time of execution of the consumer lease.

429.203(2m) (2m) Every writing evidencing the customer’s obligation to pay under a motor vehicle consumer lease shall contain immediately above or adjacent to the place for the signature of the customer, a conspicuous, printed or typewritten notice in substantially the following language:

NOTICE TO LESSEE

(a) THIS IS A MOTOR VEHICLE LEASE AGREEMENT. YOU HAVE NO OWNERSHIP RIGHTS IN THE MOTOR VEHICLE UNLESS THIS LEASE CONTAINS A PURCHASE OPTION AND YOU EXERCISE YOUR OPTION TO PURCHASE THE MOTOR VEHICLE.

(b) DO NOT SIGN THIS LEASE BEFORE YOU READ IT, INCLUDING ANY WRITING ON THE REVERSE SIDE.

(c) DO NOT SIGN THIS IF IT CONTAINS ANY BLANK SPACES.

(d) YOU ARE ENTITLED TO A COMPLETED COPY OF THIS LEASE WHEN YOU SIGN IT.

429.203(3) (3) The consumer lease shall contain all disclosures required by the federal consumer leasing act and any of the following disclosures that are not disclosed in the same or substantially similar disclosures under the federal consumer leasing act:

429.203(3)(a) (a) The gross capitalized cost, using the term “gross capitalized cost”, and an explanation of the term in substantially the following language: “The gross capitalized cost is the agreed-upon value of the vehicle ($.... [insert the agreed-upon value of the vehicle]) and any items that you pay over the lease term (such as service contracts, insurance and any outstanding prior credit or lease balance).”

429.203(3)(b) (b) Any capitalized cost reduction, using the term “capitalized cost reduction”, and an explanation of the term in substantially the following language: “The capitalized cost reduction is the amount of any net trade-in allowance, rebate, noncash credit or cash that you pay that reduces the gross capitalized cost.”

429.203(3)(c) (c) The adjusted capitalized cost, using the term “adjusted capitalized cost”, and an explanation of the term, as applicable, in substantially the following language: “The adjusted capitalized cost is the amount that is used in calculating your base periodic payment.”

429.203(3)(d) (d) The residual value of the leased vehicle, using the term “residual value”, and an explanation of the term in substantially the following language: “The residual value is the value of the vehicle at the end of the lease used in calculating your base periodic payment.”

429.203(3)(e) (e) A statement determined as follows:

429.203(3)(e)1. 1. With respect to a single-payment lease, a statement of the rent charge included in the single payment and a separate statement of the depreciation portion of the single payment.

429.203(3)(e)2. 2. With respect to a lease other than a single-payment lease, a statement of the rent charge included in the total of the periodic payments and a separate statement of the depreciation portion of the total of the periodic payments.

429.203(3)(fm) (fm) A statement on early termination of the consumer lease in substantially the following language: “Early termination. You may have to pay a substantial charge if you end this consumer lease early. The charge may be up to several thousand dollars. The actual charge will depend on when the lease is terminated. The earlier you end the lease, the greater the charge is likely to be.”

429.203(3)(g) (g) The standards to be applied by the holder in determining the excess wear and damage to the leased vehicle for which the lessee shall be held liable. These standards shall comply with the federal consumer leasing act.

429.203(3)(h) (h) Any disclosure required under sub. (2m).

429.203(4) (4) The consumer lease shall contain the names of the lessor and the lessee; the place of business of the lessor; the place of business or residence of the lessee, as specified by the lessee; and the year, make, model and, if known, serial or identification number of the motor vehicle.

429.203(5) (5) The lessor shall deliver to the lessee a completed copy of the consumer lease signed by both parties. Any acknowledgement of delivery of a copy of the consumer lease by the lessee shall be conspicuous and appear above the space reserved for the signature of the lessee.

429.203(6) (6) 

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) (b)

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) (8) 

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. 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 insurance or a gap waiver. Section 218.0148 governs gap waivers.

429.204 History History: 1995 a. 329; 2017 a. 161.

429.205 429.205 Security interest.

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)(b) (b) Any right of setoff.

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 waivers or gap insurance, 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; 2017 a. 161.

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.