Leasing or renting goods

Lots of stores allow you to lease or rent electrical appliances, computers and household goods. Leasing goods is often marketed as a cheaper option to buying them, but it can end up being a lot more expensive if you’re confused about your rights and obligations.

Things you need to know about leasing

It's expensive

Lease payments may add up to more than what the goods would usually cost to buy. You may also have to pay fees and charges during the lease or before the goods are delivered to you. These fees can include stamp duty, late payment fees and service charges.

You don't own the goods

Despite paying a large amount of money to lease the goods, much more than the cash price to buy them, you don’t own the goods unless you are able to buy them at the end of the lease.

No cooling off period, heavy contract terms and high exit fees

There is usually no cooling-off period on lease agreements and no matter what happens, even if the goods are stolen, damaged or destroyed you’ll still need to make the lease payments. You may also have to buy insurance. Some companies will lock you into a contract and if you want to get out early, you’ll have to pay all the remaining lease payments anyway.

No warranty

There is no warranty on the goods other than the basic statutory or implied warranties.

Fair Trading's advice  

Although there are many different types of consumer leases available, Fair Trading does not recommend leasing unless you have done your homework and know what you’re getting into.

Don’t be pressured. Shop around. Do your calculations and compare with other options such as paying in cash once you’ve saved the money or getting a personal loan.

IMPORTANT - Read all the rental documents very carefully and get independent advice if you don’t understand something before signing the lease agreement.

When things go wrong  

If you have a problem or dispute with the business or finance company, contact Fair Trading on 13 32 20 to find out your options or go to the resolving issues page to lodge a complaint.

Case study #1

Kim leases a fridge for $65 per month over 36 months. At the end of the lease period she has paid $2,340 in lease payments (not taking into account the fees and charges that may apply). This is a lot more compared to the retail price of the fridge, which is $1,000. Kim has paid more than double the original price.

At the end of the lease contract Kim has a few options (depending on the contract):

  • return the fridge in good condition and stop making repayments
  • offer to buy the fridge for an agreed amount
  • continue paying the agreed amount and keep using the fridge
  • upgrade to a newer model and renew the contract under new conditions.

Case study #2

David was shopping for a new laptop and the salesperson assured him that a ‘flexible’ renting agreement was the best option. David was told that under the rental agreement he would not pay more than the computer price and would be able to upgrade the laptop without commencing a new agreement and would own the laptop at the end of the agreement. It sounded like a good deal and David signed the papers.

Three weeks after David received the laptop the network card in it failed and David was advised it would take eight weeks to repair it. The store finally agreed to give David another computer to use while his was being fixed. At the same time David found out that the laptop would cost him $3,600 instead of the retail price of $1,599 and that he would not own the computer at the end of the agreement. David decided to contact Fair Trading for help. However, there was not much that the Fair Trading customer service officer could do as David had signed the contract and was bound by its terms and conditions. We strongly advise consumers read the full contract, including the small print before signing anything and ask for everything in writing from the salesperson.

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