A consumer lease is a contract where a person rents a household item (for example a fridge, TV, sofa or iPad) from a rental company. Under a consumer lease, a person must make regular payments to have use of the item and will not own the item at the end of the contract.
Before you sign the consumer lease
A consumer lease might look like a good deal because you do not need to pay a large amount of money upfront. However, you will probably end up paying a lot more under a consumer lease than if you bought the item at a shop. There may be hidden costs to a consumer lease, like insurance, which you will need to pay on top of your repayments.
Before you sign a consumer lease, you could:
- find a similar item in a shop and compare the price to the total amount you will pay under the consumer lease. It is nearly always cheaper to buy the item outright at a shop.
- think about other options, like a personal loan from a good bank, or lay-by, where you get to take home an item once you have paid it off in small amounts by an agreed date.
- apply for a loan for essential household items through the No Interest Loans Scheme (‘NILS’). To find your local NILS provider, call Anglicare or Somerville Community Services, or visit the Good Shepherd Microfinance website. Contracts can be difficult to understand. Before you sign the contract, make sure that you understand everything it says and can afford to pay the repayment amount.
- You can ask for a copy of the contract and think about it before you sign it. You may also wish to ask a friend, family member or a lawyer to read over the contract before you sign it.
Cooling off period
As a general rule, once you sign a contract you cannot cancel it without paying a penalty or extra fees. However, sometimes a cooling off period applies.
A cooling off period lets you cancel a contract within 10 business days of signing it without having to pay any fees or penalties. You should get advice from a lawyer as soon as possible if you sign a contract but then change your mind.
A cooling off period may apply if:
the contact was made over the phone, at your home, or somewhere other than the rental company’s usual place of business; and
you did not phone the rental company or ask them to come to your home with the aim of entering into a contract.
If you cannot make repayments or want help
If you are having trouble making repayments, you should talk to the rental company that is leasing you the item. If you are not happy with their response, you should seek advice from a lawyer. You can seek advice from a lawyer about any part of the contract; for example, if you do not understand what it says, if you want to pay a smaller amount, or if you want to cancel the contract.
If the item gets stolen, lost or damaged
What will happen if the item gets stolen, lost or damaged will depend on your contract. If your contract says so, you will have to keep making payments even if the item gets stolen, lost or damaged.
Darwin Community Legal Service
Phone: (08) 8982 1111
Freecall: 1800 812 953
Anglicare (Darwin Head Office)
Phone: (08) 8985 0000
Good Shepherd Microfinance
National Financial Counselling Hotline
Freecall: 1800 007 007
Somerville (Darwin Office)
Phone: (08) 8920 4100
Darwin Community Legal Service 2015: Non-profit community groups have permission to reproduce parts of this publication as long as the original meaning is retained and proper credit is given to DCLS, as the publisher.
Disclaimer: The information contained in this publication is a guide to the law in the Northern Territory. It is not a substitute for legal advice. You should talk to a lawyer about your particular legal issue. The information contained in this factsheet is current as at September 2014.