A consumer lease is a contract that lets you rent an item for a period of time, usually one to four years.
You make regular rental payments (weekly, fortnightly or monthly) until the term of the lease finishes. Then, there’s a payout figure if you want to buy it instead of returning it.
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.
This page has information on:
- things you need to know
- your consumer rights
- advice if you have a problem
- advice to be a savvy consumer
Things you need to know about leasing
It might not be cheaper in the long run
- 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 an amount of money to lease the goods, you don’t own the goods unless you are able to buy them at the end of the lease.
- Check your lease or rental agreement before you sign it. If your lease allows you to own the item when the lease ends then by law, the most the rental company can charge you is the retail price plus 48 per cent.
No cooling off period, heavy contract terms and high exit fees
- There is usually no cooling-off period on lease agreements.
- 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.
Australian Consumer Law guarantees your rights when you buy goods and services.
In fact, most products and services purchased after 1 January 2011 come with automatic consumer guarantees that the product or service you purchased will work and do what you asked for. This includes credit and loan services.
You have the right to receive:
- goods and/or services that are of acceptable quality (that is, provided with due care or skill, fit for purpose, and provided in a reasonable time)
- remedy when things go wrong (repair, refund or replacement)
- proof of purchase (like an invoice, cash register receipt, handwritten receipt or lay-by agreement)
- documentation of any contract you have entered into.
Learn more about contracts now.
Have a problem?
- Contact the business in the first instance and explain the problem. If the matter is complicated and not urgent, you could write an email or letter. We have tips and sample letters to help you.
- If you’re unable to resolve the matter with the provider, you can contact us for help on 13 32 20 or make a complaint online.
Be a savvy consumer
Although there are many different types of consumer leases available, we don’t recommend leasing unless you have done your homework and know what you’re getting into.
Before entering into an agreement, you should compare the total cost of the lease/rental with what it would cost to purchase the same product outright.
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.
"Read all the rental documents carefully and get independent advice if you don’t understand something before signing the lease agreement."