Are you looking to lease a vehicle? The following tips may be of interest to you before you lease a vehicle on a long-term basis.
Is the merchant leasing a vehicle to you holding a license from the Office de la protection du consommateur? This license is mandatory for all motor vehicle merchants.
In order to obtain a license, a merchant must provide a deposit. This money can be used to compensate you if the merchant does not comply with their obligations. The deposit could be used, for example, to refund a down payment you made to purchase a vehicle if the merchant were to go out of business before the vehicle could be delivered to you.
To make sure the merchant you are doing business with has a valid license, refer to our tool Get information about a merchant. The merchant must also:
- display the license on their premises;
- include their license number in the contract they are providing you.
It is better to visit several dealers to compare car leasing offers. Make sure to compare equivalent car leasing offers with:
- the same price;
- the same contract duration;
- the same interest rate;
- the same amount as a purchase option at the end of the contract;
- the same security deposit;
- the same kilometre allowance;
- the same fees for kilometres exceeding the contract allowance;
- the same down payment (it is generally recommended to compare offers with $0 down payment).
You can use a calculator (in French only) to determine the monthly payments or the interest rate of a loan.
You should assess your needs before leasing a vehicle.
If you want to lease a car, you should first:
- determine your budget. Even if it is a lease, you must set aside a budget for maintenance, the purchase of winter tires, and repairs due to normal wear and tear. Also account for the cost of insurance and the vehicle’s fuel consumption;
- decide which type of vehicle suits your needs;
- find out which makes of vehicles are considered good choices. You can do this by consulting magazines, guides, or specialized organizations. For example, you can obtain information from Éditions Protégez-Vous (in French only) or from the Automobile Protection Association.
The Office de la protection du consommateur does not test products. We cannot make recommendations on makes or models of vehicles to purchase.
Leasing a new vehicle
The long-term leasing of a vehicle often allows for a lower monthly payment than would purchasing a car with a credit contract. Leasing therefore makes for lower payments in the short run, but the entire cost ends up being greater than would purchasing the vehicle initially.
Determine whether you are getting a good deal if, for example, you pay $16,000 over 4 years and then pay an additional $11,500 at the end of the lease to purchase a car valued at $25,000.
Leasing a used vehicle
Thinking about leasing a used car? You should carefully consider whether it is indeed a good choice. Purchasing a car of lesser value could make more financial sense. Carefully calculate the total amount you will need to pay to use the car for the duration of the contract.
Merchants may offer you options that could increase the total price of your vehicle: an extended warranty, antirust protection, etc.
Take some time to assess the benefits of these options in relation to their price. Read the contract. Ask questions. These protections can be quite expensive compared to the benefits you receive.
Accepting or declining the additional warranty
It is your responsibility to assess whether the additional warranty (such as an extended warranty) offered to you is advantageous. Before paying for such a warranty, however, it is important to be aware of the existence of the legal warranty.
The Consumer Protection Act provides that a vehicle purchased from a merchant must serve for normal use, for a reasonable time period, given the price paid.
Before offering you an additional warranty, merchants must inform you that a legal warranty covers the vehicle you are purchasing. They are obligated to:
- verbally inform you of the existence of the legal warranty as well as what it contains;
- provide you with a short written document explaining what the legal warranty is;
- talk to you about the existence and duration of the manufacturer’s warranty, and whether it is provided free of charge with the vehicle. If this is the case, merchants must, upon request, verbally inform you of how to find out about the contents of this warranty. Fees that may be included in the price.
Fees that may be included in the price
Specific duty on new tires may be charged separately. Merchants are permitted to add this duty to your bill.
Transport fees and fees related to excise taxes on air conditioners are an integral part of the vehicle price, as you must inevitably pay them. They cannot be added to the total price you were first quoted.
The best course of action is to not make any down payment (or "deposit") until you have decided to lease a vehicle.
Before signing a leasing contract
If you have not yet signed the leasing contract, you are often considered to have received only the merchant’s offer. You have thus not entered into any agreement yet. You should not have to pay any fees: the merchant must return the down payment if you decide not to lease the car.
After signing a leasing contract
If you have signed a leasing contract but refuse to take possession of the vehicle, it is often too late to change your mind without consequences. The page Cancelling a Contract provides further information on this topic.
In Québec, a lease contract with purchase option is most commonly used. The length of that contract is often 48 months, but it can also be shorter or longer.
The road vehicle permit number must appear in the contract that is provided to you.
Evaluating your ability to pay
Before entering into a long-term lease contract with you, the merchant must evaluate your ability to pay. To find out more, refer to the page titled What Long-Term Leasing Involves.
The periodic instalments paid over the leasing period must be equal amounts. Only the final payment can be for a lesser amount. The instalments must also be spread over essentially equal periods (usually once a month).
The merchant cannot ask you to pay more than 2 instalments in advance.
When provided for by the contract, you can purchase the vehicle, for the price specified in the contract. In the original contract, the merchant must indicate the price you will have to pay if you wish to purchase the vehicle, or how to calculate that amount, as well as any other conditions you will be required to fulfill.
The merchant can request a security deposit when you sign the contract. This amount must be refunded to you when the contract ends, unless it was used to make a late payment, for example.
Contents of the contract
The page titled Consumer Tips: Before Entering a Long-term Leasing Contract in our section about long-term leases provides details about the contents of a contract.
Merchants are required to affix a label on each used vehicle they put up for sale or long-term lease. This label contains details that will help you make an informed decision.
Information listed on the label
The label must contain the following information:
- the price of the vehicle;
- a complete description of the vehicle (year of manufacture, vehicle identification number, make, model, cylinder capacity);
- the number of kilometres indicated on the odometer and the actual of number of kilometres the vehicle has travelled, if different;
- the vehicle category (A, B, C or D), for the warranty of fitness the merchant must provide, under the Consumer Protection Act;
- details regarding the manufacturer's or merchant’s warranty, if it is still valid;
- a description of any repairs made since the vehicle has been in the merchant’s possession;
- information regarding prior use of the vehicle if it was used as:
- an automobile to provide remunareted passenger transportation (a taxi or other authorized automobile);
- a driving school vehicle;
- a rental vehicle;
- a police vehicle;
- an ambulance;
- a courtesy or demo vehicle.
The name of the business or public body that owned or leased the vehicle must also be indicated. To find out what this label looks like, see a sample label (844 KB) (in French only).
The merchant's obligations indicated on the label
The label must also indicate the merchant’s obligations:
- to provide you with the previous owner’s name and phone number, upon request;
- to provide you with a mechanical inspection certificate if it is required for vehicle registration, for example if it is from outside Québec or has been declared a total loss.
Delivery of the label
The merchant is required to give you the label when you purchase or lease the vehicle. All the information contained therein is an integral part of the contract, with the exception of the sale price and the warranty details, which may be modified.
The Office de la protection du consommateur advises you to take the following precautions before leasing a used vehicle.
Test drive and inspection
Test drive the vehicle for a sufficient length of time. Driving once around the block is not enough.
You should also have the vehicle inspected by a mechanic you trust. An inspection is at your own cost and allows you to have a clear picture of the vehicle’s condition.
The merchant is required to allow you to test drive the vehicle and to have it inspected. If they refuse, you should walk away from the transaction, as the merchant might be trying to hide a serious mechanical problem from you. You could also report the merchant to the Office de la protection du consommateur, as this practice is prohibited by regulations.
Before leasing a used vehicle, it is extremely important to verify that it has already been paid for in full. Otherwise, you might be unwittingly "purchasing" the debt of its owner.
To conduct this verification, you must make a search using the Registre des droits personnels et réels mobiliers (RDPRM - in French only). There are fees for this search. It will, however, ensure that you will not pay for the vehicle twice or have it seized by a creditor.
The Office de la protection du consommateur recommends that you avoid signing any documents until you have decided to lease a particular vehicle. Contrary to popular belief, you do not have the right to cancel a signed contract if you change your mind within 10 days.
If merchants claim that your signature does not bind you to any commitment, you can ask them to write "no commitment from the consumer" on the document you are signing.
The information presented under the page Cancelling a contract provides further information on this topic.
Last update : February 28, 2023
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The information contained on this page is presented in simple terms to make it easier to understand. It does not replace the texts of the laws and regulations.
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