motor vehicle lease agreement...

Motor Vehicle Lease

Agreement Closed-End

Multistate Manual

September 2010

Form PM-MVL-CE 9/27/2010 ii

Table of Contents

INTRODUCTION................................................................................. 1 GLOSSARY....................................................................................... 2 Warranties and Limitations ................................................................. 5

Warranties and Limitations for this Manual ............................................................. 5 Warranties and Limitations for the Form(s) That Are the Subject of this Manual................. 6 Other Important Terms for the Use of this Manual..................................................... 6

Motor Vehicle Lease Agreement (MVL-CE) ............................................... 7 Part A - IDENTIFICATION OF THE LEASE ................................................ 11 Part B - DESCRIPTION OF LEASED PROPERTY (VEHICLE) ............................ 11 PART C - TRADE-IN VEHICLE AND ITS ALLOWANCE ................................... 11 PART D - Federal Consumer Leasing Act Disclosures (Reg. 213.4) ............... 12

AMOUNT DUE AT LEASE SIGNING OR DELIVERY:........................................................ 12 PAYMENTS:................................................................................................... 12 OTHER CHARGES: ........................................................................................... 13 TOTAL OF PAYMENTS:...................................................................................... 13 ITEMIZATION OF AMOUNT DUE AT LEASE SIGNING OR DELIVERY (Reg. 213.4(b)): ................ 13 YOUR PAYMENT IS DETERMINED AS SHOWN BELOW (Reg. 213.4(f)):................................ 14

PART E - ITEMIZATION OF GROSS CAPITALIZED COST................................ 16 PART F - ADDITIONAL PROTECTIONS .................................................... 16 PART G - ADDITIONAL TERMS ............................................................. 17 PART H - OTHER TERMS .................................................................... 18 PART I - SIGNATURES ....................................................................... 18

Form PM-MVL-CE 9/27/2010 1

INTRODUCTION USE OF THIS MANUAL. Use of this manual will constitute an express acceptance of all the terms set forth in the "Introduction," "Warranties and Limitations" and "Other Important Terms for the Use of this Manual" sections of this manual.

Forms and Purpose. This manual is intended to assist our customers who have purchased the following copyrighted Wolters Kluwer Financial Services motor vehicle closed-end lease forms:

MVL-CE

MVL-CE-UCCC

MVL-CE - [state abbreviation]

Usage. The forms listed above should only be used for the purposes for which they were intended.

Please note that these forms have been designed for use in closed-end lease transactions of motor vehicles to consumers that are subject to Federal Consumer Leasing Act (Regulation M) and state-enacted consumer laws and regulations. They may also be used in commercial leases of motor vehicles.

The forms listed above are intended for lease transactions of most types of motor vehicles (as defined by state law) that are licensed and allowed to be driven on public roads.

CAUTION: THESE FORMS ARE NOT DESIGNED FOR AND SHOULD NOT BE USED FOR THE FOLLOWING:

• loan transactions

• credit sales transactions, as defined by Regulation Z

• lease transactions with unequal payments

• leases with a term of four months or less

• open-end leases

• leases of property other than motor vehicles (as defined by state law) that are licensed and allowed to be driven on public roads

• transactions which require lessee to purchase credit insurance (i.e., life, accident)

• transactions which require lessee to purchase a service contract

• transactions which require lessee to purchase a Gap Waiver or Gap Coverage product

Format. In this manual, we attempt to answer the most common questions and problems you might confront in completing these forms, with special emphasis on the disclosures required by the Consumer Leasing Act and Regulation M. THIS MANUAL IS NOT INTENDED TO ADDRESS STATE SPECIFIC LAWS.


The pages of the multistate MVL-CE are reduced and copied at the beginning of this manual. This manual may be used for the MVL-CE and as a manual for corresponding parts of the MVL-CE-UCCC and state-specific versions. State-specific questions are not addressed in this manual.

The parts of the MVL-CE thus reduced and copied are numbered (for example, A-1, A-2, B-1, B-2, etc.) to correspond with the similarly numbered explanatory text in this manual. Feel free to photocopy the numbered sample so you have a loose sample to follow along with the text. The explanatory text begins with a simple statement of what would commonly be filled in on the line being discussed. In some cases, this simple explanation is followed by a more detailed explanation, with citations to Regulation M and cross-references to other portions of the form which need to be considered with the item under discussion. You may also want to refer to the Glossary for definitions and explanations of key terms.

GLOSSARY Throughout the text of this Introduction, the Disclaimer of Warranties, the Limitation of Liability, and the Manual itself, we use certain abbreviations and terms:

The Term: Means:

We Wolters Kluwer Financial Services, Inc.

You The Lessor.

Reg. 213.3(a) Section 3(a) of the Federal Reserve Board’s Regulation M (Consumer Leasing) which may be found at 12 Code of Federal Regulations 213.3(a).

Commentary The Official Staff Commentary on Regulation M (Consumer Leasing). In this manual, we normally use the Regulation number preceded or followed by the word “Commentary.” This means you should read the Commentary to the Regulation having that number. We do not use the numbering found in the Commentary, which occasionally varies somewhat from the numbering of the Regulation.

U.C.C. § 9-204 The Uniform Commercial Code Article 9, Section 204.

C.F.R. Code of Federal Regulations.

12 U.S.C. § 901 Title 12 United States Code Section 901.

FTC Federal Trade Commission.

Adjusted Capitalized Cost The amount used by the lessor in calculating the base periodic payment. It equals the gross capitalized cost less the capitalized cost reduction. Reg. 213.2(f).


Capitalized Cost Reduction The total amount of any rebate, cash payment, net trade-in allowance, and noncash credit that reduces that gross-capitalized cost. Reg. 213.2(f).

Closed-end Lease A lease in which the lessee is not liable at the end of the scheduled lease term for the difference between the residual value and realized value of the leased property. A closed-end lease is sometimes referred to as a “walk-away” lease. Reg. 213.2(d) and Commentary. In a closed-end lease, the lessor agrees to pay the difference (absorb the loss, if any) between the lessor’s estimate of what the vehicle will be worth at the end of the lease (residual value) and the actual value of the vehicle at the end of the lease (realized value).

Gross Capitalized Cost The value of the leased property and any items (such as taxes, insurance, service agreements and any outstanding prior credit or lease balance) that are capitalized or amortized during the term of the lease. Reg. 213.2(f).

Lessee The person(s) who are offered the lease. Guarantors are not lessees for purposes of Regulation M. Reg. 213.2(g) and Commentary.

Lessor The person who regularly leases, offers to lease, or arranges for the lease of personal property. Any lessor who has leased, offered, or arranged to lease personal property more than five times in the preceding calendar year or more than five times in the current calendar year is subject to Regulation M. Reg. 213.2(h) and Commentary.

Open-end Lease A lease in which the lessee’s liability at the end of the lease term is based on the difference between the residual value of the leased property and its realized value. Reg. 213.2(i). In an open-end lease, the lessee agrees to pay the difference (if any) between the lessor’s estimate of what the vehicle will be worth at the end of the lease term (its “residual value”) and the actual value of the vehicle at the end of the lease. This difference can only be determined at the end of the lease term.

Realized Value The actual value of the leased property at early termination or at the end of the lease term. Subject to the terms of the contract and state law, Regulation M allows the realized value to be calculated in one of the following ways: (1) the price received by the lessor for the leased property at disposition (sale); (2) the highest offer for disposition; or (3) the fair market value of the property at the end of the lease term. Reg. 213.2(m).


Residual Value The expected value of the leased property at the end of the lease term as estimated or assigned at consummation of the lease by the lessor. It is used in calculating the base periodic payment. Reg. 213.2(n).

Form Specific. This manual is written for use only with respect to the above listed forms. It is not intended for use with respect to any other forms. For state-specific versions, some of the terms discussed may not be applicable. Additionally, there may be provisions in state-specific contracts which are not discussed in this manual. Feel free to call us at our toll-free number (1-800-397-2341) if you need information about specific sections.

Private Attorneys. In developing this manual, the forms to which it pertains, and all of our other forms, we have to interpret many statutes, cases and regulations.

We strongly encourage you to seek the advice of your own attorney concerning the use and legality of this manual, the forms to which it pertains, and all of our other forms.

To assist you and your counsel in your review of our forms and this manual, we have included legal citations in this manual. If you or your counsel’s interpretations are contrary to ours, you should follow your own interpretations in using and completing the form.

Comments. We encourage you to comment on and criticize this manual, the forms to which it pertains, and all of our other forms. We make every effort to keep up with statutes, regulations, case law and lending/leasing practices, but the lending/leasing industry is constantly evolving, and our effort is often assisted by our customers. We especially appreciate copies of any statutes or cases which you might feel are pertinent. Please submit your comments in writing either to your Sales Representative or to:

Compliance Services Wolters Kluwer Financial Services, Inc. 6815 Saukview Drive P.O. Box 1457 St. Cloud, MN 56302-1457


Warranties and Limitations

Warranties and Limitations for this Manual

WARRANTY DISCLAIMER.

THIS MANUAL (INCLUDING ANY UPDATES TO IT) IS PROVIDED TO YOU AS IS AND WITH ALL FAULTS. WOLTERS KLUWER FINANCIAL SERVICES, INC. (WKFS) DOES NOT EXPRESSLY OR IMPLIEDLY WARRANT THE LEGALITY OR UTILITY OF THIS MANUAL OR THE INFORMATION THAT IT CONTAINS. THE USER OF THIS MANUAL MUST MAKE HIS/HER OWN INDEPENDENT JUDGMENT ON THESE ITEMS. WKFS MAKES NO WARRANTY, EXPRESS, IMPLIED, BY DESCRIPTION, BY SAMPLE OR OTHERWISE, AND IN PARTICULAR WITHOUT LIMITATION, MAKES NO IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS OF PURPOSE REGARDING THIS MANUAL.

WKFS employees, sales representatives, and other WKFS agents and representatives do not have authority to create any warranty obligations regarding this manual or to modify the above Warranty Disclaimer. Any such created warranty obligations or modifications will not be effective unless they are in writing and signed by the President or any Vice President of WKFS.

LIMITATION OF LIABILITY AND REMEDIES.

WKFS's liability, whether in contract, warranty, in tort, or otherwise arising in any way in connection with the providing, selling or licensing of this manual (including any updates to it) or your using it SHALL NOT INCLUDE LIABILITY FOR ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES, LOST PROFITS, LOSS OR EXPENSE. WKFS's liability for any damages based on the providing, selling or licensing of this manual (including any updates to it) or your using it, regardless of the form of action, shall not be more than the amount you paid for it or ten dollars, whichever is less.

TIME LIMIT.

No action, regardless of form, arising out of the providing, selling or licensing of this manual or your using it, may be brought by either party more than one (1) year after the cause of action has occurred, except that this limitation will not apply to an action for non-payment or intellectual property infringement brought by WKFS.

NO SUBSTITUTE FOR LEGAL COUNSEL.

Before using this manual, you are advised to have your attorney review it to determine its legal sufficiency for your purposes. You acknowledge that WKFS is not authorized to practice law, nor may any of WKFS's officers, employees or agents provide legal counsel or accounting advice to you or your institution. Thus, any questions requiring legal or accounting advice must be directed to your institution's attorney or accounting professional for whom WKFS has no obligation or liability. The following notice is required by law:

WOLTERS KLUWER FINANCIAL SERVICES, INC., PRODUCTS AND SERVICES ARE NOT A SUBSTITUTE FOR THE ADVICE OF AN ATTORNEY


Warranties and Limitations for the Form(s) That Are the Subject of this Manual

The Form(s) that are the subject of this manual are covered by an express warranty as follows:

• Preprinted Form(s). If you received the Form(s) in preprinted format, they are covered by the Wolters Kluwer Financial Services 2010 Limited Compliance Warranty for Paper and Static Forms–Indirect Lending and Lease Documents, as it may be updated or amended from time to time. The current Limited Compliance Warranty is located on WKFS's internet website: www.wolterskluwerfs.com. Refer to the website for terms of the warranty.

• WKFS Software. If you produce the Form(s) using WKFS document-generating software, they are covered by the express warranty contained in your WKFS software license agreement. Refer to your license agreement for terms of the warranty.

• Electronic Format. If you received the form(s) in an electronic format ("EForms" or other electronic images) through a license with WKFS or with a third party provider, they are covered by the express warranty contained in your license agreement with WKFS or the third party provider. Refer to your license agreement for terms of the warranty.

Other Important Terms for the Use of this Manual

APPLICABLE LAW.

The terms under which this manual is provided, sold, licensed or used will be governed by the laws of the State of Minnesota without regard to its conflict of laws provisions or those of any other state. Any action relating in any way to this manual will be exclusively venued in a court of competent jurisdiction in the State of Minnesota.

COPYRIGHT.

No part of this manual or any of WKFS's copyrighted forms may be reproduced by any person, by any means, or for any reason, without WKFS's express written permission. WKFS vigorously enforces its copyright interests and you should be aware that there are criminal penalties as well as civil penalties for violation of copyright law. For additional information about reproducing, licensing, or purchasing this manual, please contact us at:

Wolters Kluwer Financial Services, Inc. 6815 Saukview Drive P.O. Box 1457 St. Cloud, MN 56302-1457

Telephone: 1-800-397-2341


Motor Vehicle Lease Agreement (MVL-CE)


Part A - IDENTIFICATION OF THE LEASE A-1 Check the appropriate box to indicate whether the lease is a monthly payment lease or a

single payment lease.

A-2 Fill in the name and address of the lessor. The identity (name) of the lessor must be disclosed. The address and telephone number of the lessor are not required by Regulation M, but may be required by state or other applicable law.

A-3 Fill in the name(s) and address(es) of the lessee(s).

A-4 Fill in any number that you have assigned to the lease.

A-5 Fill in the county in which the leased vehicle will ordinarily be kept when not in use.

A-6 Fill in the date that you are making the lease. Regulation M requires that disclosures be given to the lessee prior to consummation of the lease. Reg. 213.3(a)(3). The disclosures must be given to the lessee with a dated statement that identifies the parties. Reg. 213.3(a)(1).

A-7 Check this box if the name(s) and address(es) and signature(s) of additional lessee(s) are on an attached addendum.

A-8 Check this box if the lease is for business, commercial or agricultural purposes.

Part B - DESCRIPTION OF LEASED PROPERTY (VEHICLE) B-1 Enter in the appropriate areas the year, make, model, body style, vehicle identification

number and beginning odometer reading of the leased vehicle. Regulation M requires that the vehicle be sufficiently described to identify the vehicle to the lessee and lessor. Reg. 213.4(a).

B-2 Check the appropriate box indicating whether the motor vehicle is new, used, or a demo at the beginning of the lease term.

B-3 Describe to the extent you deem appropriate any items the leased motor vehicle is equipped with.

PART C - TRADE-IN VEHICLE AND ITS ALLOWANCE C-1 If there is a trade-in, describe it by entering in the appropriate areas the year, make and

model of the vehicle. If there is no trade-in, either leave this area blank or enter “N/A” or “not applicable”.

C-2 Enter on line C-2 the gross amount of any trade-in allowance (the trade-in allowance before deducting any prior credit or lease balance being paid by the lessor with respect to the trade-in vehicle).

C-3 Enter on line C-3 the amount of any prior credit or lease balance being paid by the lessor with respect to the trade-in vehicle.


C-4 Enter on line C-4 any net trade-in allowance, but not less than zero. The net trade-in allowance is the C-2 amount minus the C-3 amount, unless the result is a negative number, in which case the net trade-in allowance is zero. The net trade-in allowance also appears in D-17.

PART D - Federal Consumer Leasing Act Disclosures (Reg. 213.4) BUSINESS PURPOSE LEASES AND REGULATION M DISCLOSURES: The MVL-CE is drafted so that it can be used either for consumer purpose leases or for business, commercial or agricultural purpose leases. To prevent the need to repeat important terms, the Federal Consumer Leasing Act Disclosures serve as both disclosures and lease contract terms. Although Regulation M applies only to consumer purpose leases, it is necessary to complete these disclosures on the MVL-CE for business, commercial or agricultural leases in order to provide the important contract terms that they include.

USE OF ESTIMATES: Regulation M provides that if any amount or other item needed to comply with the required disclosure is unknown or unavailable after reasonable efforts have been made to ascertain the information, you may use a reasonable estimate that is based on the best information available to you. If an estimate is used, you must clearly identify the information as an estimate. Reg. 213.3(d). One way to identify information as an estimate is by putting an E immediately after it and adding language in H-1 that “An E immediately after information means that the information is an estimate.”

AMOUNT DUE AT LEASE SIGNING OR DELIVERY:

D-1 Fill in on line D-1 the amount due at lease signing or delivery. This is the total amount to be paid at or before consummation or by delivery if delivery occurs after consummation. The itemization of this amount appears on lines D-7 through D-16. The amounts on lines D-1, D-16, and D-20 should all be the same.

PAYMENTS:

D-2 Complete the payment schedule. Regulation M requires that you disclose the number, amount, and due dates or periods of payments scheduled under the lease, and the total amount of the periodic payments. Reg. 213.4(c). For a Monthly Payment Lease, fill in lines D-2a through D-2f as follows (and don’t fill in lines D-2g and D-2h):

D-2a Fill in on line D-2a the amount of the first monthly payment.

D-2b Fill in on line D-2b the date the first monthly payment is due.

D-2c Fill in on line D-2c the number of remaining monthly payments due during the term of the lease.


D-2d Fill in on line D-2d the monthly payment amount of the remaining monthly payments.

D-2e Fill in on line D-2e the day of the month on which the remaining monthly payments are due.

D-2f Fill in on line D-2f the total of all the monthly payments.

For a Single Payment Lease, fill in lines D-2g and D-2h as follows (and don’t fill in lines D-2a through D-2f:

D-2g Fill in on line D-2g the amount of the single payment under the lease.

D-2h Fill in on line D-2h the date when the single payment under the lease is due.

OTHER CHARGES:

D-3 Fill in the amount of any disposition fee on line D-3. A disposition fee is a fee the lessee must pay when the vehicle is returned to you at the end of the lease term. See also line G-2.

D-4 Enter in area D-4 the type and amount of any other charges that are not included in the monthly payments or in the single payment. Reg. 213.4(d). Do not include here fees imposed for early termination of the lease, late payment fees, or default fees. Also, do not include here fees and charges collected by you on behalf of third parties, such as taxes. If you are unsure whether a particular fee belongs here, the Commentary to Reg. 213.4(d) indicates that the fee may be disclosed.

D-5 Add the amounts on lines D-3 and D-4 and place the total on line D-5.

TOTAL OF PAYMENTS:

D-6 On line D-6 fill in the total of payments as required by Reg. 213.4(3). This amount is:

(a) the amount due at lease signing or deliver on line D-1, plus

(b) the total of the payments on line D-2f or D-2g, plus

(c) the total of other charges on line D-5, minus

(d) the amount of the first monthly payment if, but only if, this amount is included on line D-8, and minus

(e) any refundable amounts (for example, the refundable security deposit) if, but only if, they are included on lines D-1, D-2f, or D-2g.

ITEMIZATION OF AMOUNT DUE AT LEASE SIGNING OR DELIVERY (Reg. 213.4(b)):

Amounts should be itemized in lines D-7 through D-16 only if they are collected at the time of lease signing or delivery. The amounts itemized must not also be included in the itemization of gross


capitalized cost (lines E-1 through E-9) or in the lessee’s monthly payments (D-2f) or the lessee’s single payment (D-2g), because that would result in their being paid twice.

D-7 Fill in the capitalized cost reduction on line D-7. This amount is the total of any rebate, cash payment, net trade-in allowance, and noncash credit that reduces the gross capitalized cost. Reg. 213.2(f). It is similar in nature to a down payment on the leased property that reduces the amount to be capitalized over the term of the lease. This amount does not include any amount included in a periodic payment made at lease signing or delivery. See Commentary to Reg. 213.4(b). This number will also be filled in on line D-23. Remember that the cash and credits received at lease signing or delivery will not all reduce the gross capitalized cost, because some will be used to pay other amounts itemized on lines D-8 through D-15.

D-8 Fill in on line D-8 the amount of the first monthly payment if this amount is collected at the time of lease signing or delivery. This is the same amount as appears on line D-2a.

D-9 Fill in on line D-9 the amount of the single payment if this amount is collected at the time of lease signing or delivery. This is the same amount as appears on line D-2g.

D-10 Fill in on line D-10 the total amounts of any refundable security deposits. The security deposits may be used to pay any amounts that the lessee does not pay when due. You are required to return any remaining amounts of the refundable security deposits at the end of the lease. Note that some states do not allow security deposits to be taken, and some states require special handling of any security deposits that are taken.

D-11 Fill in on line D-11 the registration fees paid to government officials.

D-12 Fill in on line D-12 the amount of title fees paid to government officials.

D-13 Fill in on line D-13 the amount of any acquisition fee.

D-14 Fill in on line D-14 the amount of any documentation fee.

D-15 Describe in this area by type and amount any other amounts collected at the time of lease signing or delivery.

D-16 Add the amounts on lines D-7 through D-15 and enter the total on line D-16. This amount should be the same as the amounts on lines D-1 and D-20.

D-17 Fill in the net trade-in allowance on line D-17. This is the same number as appears on line C-4.

D-18 Rebates and non-cash credits should be totaled and filled in on line D-18. Only include in this total rebates applied toward the amount due at lease signing or delivery.

D-19 On line D-19 fill in the amount to be paid in cash at lease signing or delivery. This is intended to include payments by check or other payment methods in addition to currency.

D-20 Add lines D-17, D-18, and D-19 and fill in the total on line D-20. The amount on line D-20 should be the same as the amounts on lines D-1 and D-16.

YOUR PAYMENT IS DETERMINED AS SHOWN BELOW (Reg. 213.4(f)):


D-21 Fill in on line D-21 the value of the vehicle being leased as agreed upon between you and the lessee. This amount will include charges for vehicle accessories and options and delivery or destination charges. You may also include taxes or fees for title, licenses, and registration that are capitalized.

D-22 Fill in on line D-22 the amount of the gross capitalized cost from line E-9. This will be the sum of the agreed upon value of the leased vehicle plus any charges for items such as service contracts, insurance, taxes, outstanding prior credit or lease balance, etc., including all items that are to be capitalized or amortized during the lease term.

D-23 Fill in on line D-22 the amount of the capitalized cost reduction. This is the sum of any net trade-in, rebate, noncash credit, and cash paid that is used to reduce the gross capitalized cost. This must be the same as the amount on line D-7.

D-24 Subtract line D-23 from line D-22 and fill in the difference on line D-24 as the adjusted capitalized cost. The adjusted capitalized cost is the amount used in calculating base payments.

D-25 The residual value of the leased vehicle should be filled in on line D-25. The residual value is your estimate of the leased property’s value at the end of the lease term. It is used in calculating base payments.

D-26 Subtract line D-25 from the amount on line D-24 and fill in the difference on line D-26. This amount reflects the vehicle’s expected decline in value through normal use and items paid over the term of the lease. The amount on line D-26 is labeled as depreciation and any amortized amounts and is the difference between the adjusted capitalized cost and the residual value.

D-27 On line D-27 fill in the rent charge. This is the amount charged in addition to the depreciation and any amortized amounts.

D-28 Add lines D-26 and D-27 together and fill in the total on line D-28. This is the total of base payments.

D-29 On line D-29 fill in the number of months in the lease term.

D-30 Fill in on line D-30 the number of payments under the lease.

D-31 Divide line D-28 by line D-30 to calculate the base payment and enter the result on line D-31.

D-32 On line D-32 fill in the sales/use tax that will be added to the base payment. If this is a monthly payment lease this will be the total sales/use tax divided by the number of monthly payments, and if this is a single payment lease this will be the total sales/use tax. Be careful that any amount entered on this line is not also included in the gross capitalized cost on line D-22 or in the amount due at lease signing or delivery on line D-16.

D-33 Enter the type and amount of any other charges that are to be added to the base payment. Be careful that any amount entered here is not also included in the gross capitalized cost on line D-22 or in the amount due at lease signing or delivery on line D-16.


D-34 Add the amounts on lines D-31, D-32, and D-33 and enter the total on D-34. The amount on line D-34 should be the same as the amount on line D-2d for a monthly payment lease and the amount on line D-2g for a single payment lease.

D-35 If you impose charges for excess mileage, fill in the mileage that triggers this charge on line D-35. This is an annual mileage, so if the lease is a multi-year lease you need to convert the total allowed miles to a per year number. Reg. M disclosures are designed for an annual mileage which requires the lessee to drive the miles at an even rate throughout the lease term.

D-36 Fill in on line D-36 the excess mileage charge as a per mile charge for each mile over the number on line D-35.

D-37 Check the box on line D-37 if the lessee is given the option to purchase the vehicle at the end of the scheduled lease term. If this option is given to the lessee you must disclose the purchase price on line D-37a and any option fee on line D-37b. Official fees for taxes, tags, licenses and registration are not included here.

PART E - ITEMIZATION OF GROSS CAPITALIZED COST Amounts should be itemized in this section only if the amounts are to be amortized over the scheduled lease term. Amounts should not be itemized in this section if they are due at lease signing or delivery (see lines D-7 through D-16) or if they are paid as additions to base payments (see lines D-32 and D-33).

E-1 Fill in on line E-1 the agreed upon value of the vehicle. This should be the same as the amount on line D-21.

E-2 Fill in on line E-2 all sales/use, excise and other taxes that are capitalized.

E-3 Fill in on line E-3 all title, license and registration fees that are capitalized.

E-4 If a service contract is sold as a part of the transaction and is factored into the base payments (capitalized), include the charge for the service contract on line E-4. This amount should be the same as the amount on line F-3.

E-5 Fill in on line E-5 all documentation fees that are capitalized.

E-6 If there is a trade-in, fill in on line E-6 the amount of any prior credit balance or lease balance on the trade-in that is being paid off by the lessor. This amount should be the same as the amount on line C-3.

E-7 Fill in on line E-7 all acquisition fees that are capitalized.

E-8 Enter on line E-8 by type and amount any other charges or costs that are capitalized.

E-9 Add all the amounts on lines E-1 through E-8 and fill the total in on line E-9.

PART F - ADDITIONAL PROTECTIONS


F-1 Check this box if the lessee is purchasing a service contract.

F-2 Fill in on line F-2 the term of the service contract.

F-3 Fill in on line F-3 the price of the service contract.

F-4 Fill in on line F-4 the coverage limits of the service contract.

F-5 Check this box if the lessee is purchasing a gap waiver or gap coverage.

F-6 Fill in on line F-6 the term of the gap waiver or gap coverage.

F-7 Fill in on line F-7 the price of the gap waiver or gap coverage.

F-8 Fill in on line F-8 the coverage limits of the gap waiver or gap coverage.

F-9 Check this box if the lessee is purchasing mechanical breakdown protection.

F-10 Fill in on line F-10 the term of the mechanical breakdown protection.

F-11 Fill in on line F-11 the price of the mechanical breakdown protection.

F-12 Fill in on line F-12 the coverage limits of the mechanical breakdown protection.

F-13 Check this box if the lessee is purchasing an extended warranty.

F-14 Fill in on line F-14 the term of the extended warranty.

F-15 Fill in on line F-15 the price of the extended warranty.

F-16 Fill in on line F-16 the coverage limits of the extended warranty.

F-17 Have the lessee(s) sign here if, but only if, they are purchasing a service contract, gap waiver or gap coverage, mechanical breakdown protection, or an extended warranty.

F-18 Fill in the date of the lessee(s)’ F-17 signature(s).

PART G - ADDITIONAL TERMS G-1 If allowed by state law, fill in the amount of any vehicle return fee on line G-1. A return

vehicle fee is a fee you impose on the lessee if (a) the lease is terminated early and (b) the lessee returns the vehicle to you, rather than buying it. This fee generally should reflect costs you incur in connection with the return and disposition of the vehicle. However it should not reflect any costs you are recovering under the Early Termination Liability section of the lease.

G-2 If allowed by state law, fill in the disposition fee on line G-2. A disposition fee is a charge imposed at the end of the scheduled lease term if the lessee does not purchase the vehicle.

G-3 On line G-3 fill in the total estimated amount the lessee will pay for official and license fees, registration, title, and taxes over the entire lease term. This amount should include those


included in the amount due at lease signing or delivery, those included in or added to the base payments, and those paid in any other manner. Any tax payable by you that is passed on to the lessee must be included here. However, if a tax is payable by you and is absorbed as a cost of doing business, the tax does not need to be disclosed. Reg. 213.4(n) and Commentary.

G-4 Check this box if a service charge for unclaimed security deposit refunds will be imposed.

G-5 Fill in on line G-5 the amount of the monthly service charge for unclaimed security deposit refunds.

G-6 Check this box if the standard written manufacturer’s warranty applies.

G-7 Check this box if you wish to add any additional provisions.

G-8 If G-7 is checked, set forth the additional provisions in this area.

PART H - OTHER TERMS H-1 This space can be used to add other terms if you wish.

PART I - SIGNATURES I-1 Have the lessee(s) sign here to indicate that there are no unwritten agreements.

I-2 Fill in the date of the lessee(s)’ I-1 signature(s).

I-3 Have the lessee(s) sign here to agree to the terms of the lease.

I-4 Fill in the date of the lessee(s)’ I-3 signature(s).

I-5 Fill in the name of any assignee of the lessor’s interest under the lease.

I-6 Fill in the address of any such assignee.

I-7 Fill in the phone number of any such assignee.

I-8 The lessor should sign here. By signing the lessor agrees to the terms of the lease; agrees to any assignment of its interest under the lease; and indicates that it has inspected the lessee(s)’ drivers license(s), compared and verified the lessee(s)’ signature(s), and satisfied itself that the lessee(s) are currently licensed to drive in the lessee(s)’ respective state(s) of residence.

I-9 Fill in the date of the lessor’s I-8 signature.