Chapter 429

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.

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) (1) 

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) (3) 

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) (4) 

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) (5) 

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.