What should my lease contract contain?

What should my lease contract contain?

 

 

Leasing has its peculiarities that distinguish it from other financing instruments, but besides its traditional features there are those that arise in the negotiation process and are crucial to me.

 

 

 

General terms and conditions are advertised in the premises to which customers have access and, if possible, in electronic form. I have to familiarize myself with these conditions and read them carefully. They must be formulated in a clear and understandable way, and if I need further clarification, I have the right to receive them. If the general terms contain clauses that put me in a disadvantaged position as a party to the contract, they lose their strength. If they bring me to court for their failure to do so, I can object based on the grounds that they are contrary to Bulgarian law and the court will refuse to apply the unfair clause.

 

Determination of interest in my contract

I have to be careful to check if my interest rate is fixed in the contract, because if it is not, it allows the leasing company to raise the interest. If the interest rate changes, the contract should state how often it can change and under what conditions. Any interest rate change directly reflects my monthly repayments and therefore the total cost of the loan.

 

 

 

When buying a car, I have to know that if I want to use the car outside Bulgaria, I have to have a power of attorney in writing. The lessor may require that I be insured with Full Auto Insurance for abroad, insurance, Green Card and others that she deems necessary. These requirements can be written as clauses in the contract and if they are marked there, I need to get acquainted with them in detail.

 

The lease must include the delivery time of the vehicle. I am entitled, if I do not receive the vehicle at the agreed date and time, to terminate the contract. Accordingly, I am entitled to compensation under the general rules. If I have paid the lessor advance installments for the car, then the delay in delivery of the car should return them to me.

 

If I get the car in a condition that does not meet the agreed requirements, then I have the right to demand damages, a reduction in the price or even the termination of the contract, and in all these cases I will get compensation. For example, we have come to terms with a brand-new car that works without any comments and no external flaws. In this case, we enter into a leasing contract for such a car, but then I get a car with certain external remarks. Depending on the extent of the shortcomings, I can take advantage of any of the three options the law gives me.

 

Termination

The contract may be terminated early. In this case, the country initiated early termination should compensate the other party. If the lessor terminates the contract, I have to take the difference if I make a new lease with him. If I terminate the contract, I have to compensate my lessor unless at the time of termination the interest rate is fixed. The contract may be terminated by unilateral written notice, but compensation is due.

 

NB! It is unlikely that the leasing company will go bankrupt especially when it is large or part of a bank and so on, but there are also very small companies that offer leasing cars and there the likelihood of bankruptcy is greater. Usually, there is no clause in leasing contracts as to what happens if the lessor goes bankrupt. My leasing vehicle is still my lessor's property and serves as a collateral for its creditors. The moment the vehicle is being seized, I lose it. The same is true when no bankruptcy occurs, but there are law enforcement actions against my lessor. Unfortunately, there are generally no clauses in leasing contracts that provide me with such a scenario, so I have to carefully choose which leasing company I will sign a contract with.