NEW JERSEY AUTOMOBILE LEASING LAW 
The New Jersey Automobile Leasing Law, N.J.S.A. 56:12-61 contains various protections
for consumers. 

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56:12-61 Definitions
As used in sections 1 through 8 and sections 11 through 14 of this act:

"Adjusted capitalized cost" means the agreed upon amount which serves as the basis for determining the periodic lease payment and a 
portion of the lessee's early termination liability, computed by subtracting from the gross capitalized cost any capitalized cost reduction.

"Business day" means every day other than a Saturday, a Sunday, or a day on which State-chartered banks in New Jersey are required
to be closed.

"Capitalized cost reduction" means any payment made by cash, check, rebates or similar means that are in the nature of down
 payments made by the lessee and any net trade-in allowance granted by the lessor at the inception of the lease for the purpose of
 reducing the gross capitalized cost but does not include any periodic lease payments due at the inception of the lease or all of the
 periodic lease payments if they are paid at the inception of the lease.

"Director" means the Director of the Division of Consumer Affairs in the Department of Law and Public Safety.

"Division" means the Division of Consumer Affairs in the Department of Law and Public Safety.

"Fair market value commercial lease" means a contract or other agreement between a lessor and a lessee in which the vehicle is to be
 used primarily for business or commercial purposes and which provides an option for the purchase of the vehicle by the lessee from
 the lessor at its fair market value at the end of the lease term.

"Fleet lease" means a contract or other agreement between a lessor and a lessee entered into after the effective date of this act
nd in which the vehicles are to be used primarily for business or commercial purposes that is either: a written agreement for the 
use of at least two vehicles that includes an agreement for an option to use at least one additional motor vehicle; or a
written agreement for the lease of five or more vehicles.

"Gross capitalized cost" means the amount, which, when reduced by the amount of the capitalized cost reduction, equals the 
adjusted capitalized cost. The gross capitalized cost shall include, the cost of the vehicle and, without limitation, taxes,
registration, license, acquisition, assignment and other fees and charges for insurance, for a waiver of the contractual obligation 
to pay certain liability in the event the motor vehicle is damaged, stolen or otherwise lost, for accessories and their installation, 
for delivering, serving, repairing or improving the motor vehicle and for other services and benefits incidental to the lease.
It may also include, with respect to a vehicle or other property traded-in in connection with a lease, the unpaid balance
of any amount financed under an outstanding vehicle loan agreement or vehicle retail installment contract or the unpaid portion
of the early termination obligation under any other obligation of the lessee.

"Lease" means a contract or other agreement between a lessor and a lessee, other than a fleet lease, a fair market value commercial
 lease, or a TRAC lease, entered into after the effective date of this act for the use of a motor vehicle by the lessee for a period 
of time exceeding 120 days, whether or not the lessee has the option to purchase or otherwise become the owner of the motor vehicle 
at the expiration of the lease. A lease shall not be deemed to be a retail installment contract, as defined in subsection (b) of
section 1 of P.L.1960, c.40 (C.17:16C-1), unless the lessee, for no or for a nominal consideration, becomes the owner, or has the 
option of becoming the owner, of the motor vehicle at the end of the term of the lease.

"Leasing dealer" means a person who, in the ordinary course of business, offers or enters into motor vehicle leases or who in the 
course of any 12-month period offers or enters into more than three motor vehicle leases. The term "leasing dealer" shall not include
a person to whom a lease is assigned  by a leasing dealer.

"Lessee" means a person who leases a motor vehicle under a lease.

"Lessor" means a leasing dealer who holds title to a motor vehicle leased to a lessee under a lease or a leasing dealer who holds 
the lessor's rights under the lease or a person to whom a lease is assigned. "Motor vehicle" or "vehicle" means a motor vehicle as 
defined in R.S.39:1-1, except the living facilities of motor homes. 

"Purchase option price" means total cost to the lessee, excluding sales tax, to purchase the motor vehicle at the end of the lease
term."

Residual value" means the projected fair market value of the motor vehicle at the end of the lease term.

"TRAC lease" means a contract or other agreement between a lessor and a lessee which contains a "terminal rental adjustment clause," 
as that provision is defined in subsection (h) of 26 U.S.C. s.7701.


56:12-62. Lease requirements 

3. Every lease:

a. Shall be in writing and contain all of the terms and conditions of the lease agreement between the lessor and the lessee and 
shall be signed by the lessor and lessee; 

b. Shall state the names and addresses of all parties, and the phone number of the leasing dealer. If the dealer knows the identity
of the party to whom the leasing dealer intends to assign the lease, the dealer shall include in the lease the name, address 
and telephone number of the assignee. If the leasing dealer does not include the name, address and telephone number of the 
assignee in the lease, the dealer or the assignee shall, promptly upon assignment, mail or personally deliver to the lessee the name, 
address and telephone number of the assignee; 

c. Shall state the dates when the lease is executed by the parties;

d. Shall identify the lease with the term "lease" in 14-point bold type and shall be in a style and format to be determined by the
 director by regulation; 

e. Shall be completed in full without any blank spaces to be filled in after the lease is signed by the lessee; 

f. Shall specify the periodic basis or intervals when the lease payments shall be payable; 

g. Shall provide the following information concerning the conditions of the lease: 

(1) Whether or not the lessee has the option to purchase the motor vehicle at the end of the lease term, and if so, either: 

(a) the purchase option price, or

(b) the method for ascertaining the purchase option price. If the lease includes a method for determining the purchase option price, 
and that method is based upon an amount set forth in a publication, the identity of the publication and the classification contained
within the publication to be used, shall be included. If the publication ceases to exist, the lessor shall immediately notify the lessee 
of that fact and inform the lessee of the identity of the comparable publication which will be utilized to ascertain the 
purchase option price. If a method for ascertaining the purchase option price not set forth in a publication is included in the lease,
 the lease shall set forth a good faith estimate of the amount, using that method; 

(2) The total amount of all payments required at the inception of the lease term, including any refundable security deposit , 
any trade-in allowance and any nonrefundable payment such as a down payment or capitalized cost reduction, required at the
beginning of the lease, or a statement that no payment is required at the beginning of the lease; 

(3) The number of periodic payments to be paid during the term of the lease and the amount of each payment; 

(4) A description of the standards to be used by the lessor in determining excessive wear or damage, and any liability the lease 
mposes upon the lessee at the end of the term of the lease, including any liability which may be imposed upon the lessee because of
excessive wear or damage of the motor vehicle and any disposition costs imposed upon the lessee; 

(5) (a) If the lease contains a purchase option, the total cost of the lease, assuming there is no default and that the lessee 
exercises the purchase option at the end of the term of the lease , which shall be the sum of: (i) the total amount of all payments required 
at the beginning of the lease; (ii) the total amount to be paid in periodic payments during the term of the lease;
(iii) the amount of any liability the lease imposes upon the lessee at the end of the term of the lease; and (iv) 
the purchase option price. 

(b) If the lease does not contain a purchase option or if the purchase option price is not set forth in the lease, the total fixed cost o
f the lease , which shall be the sum of (i), (ii) and (iii) of subparagraph (a) of this paragraph. 

(c) For purposes of calculating the total cost of the lease under subparagraph (a) of this paragraph or the total fixed cost of the lease
 under subparagraph (b) of this paragraph , the amount of the refundable security deposit and insurance shall be excluded; 

(6) The formula which shall be used by the lessor to calculate the total liability of the lessee if the lease is terminated by the lessee; 

(7) The residual value of the vehicle;

(8) The total number of miles or the number of miles per month or year which the vehicle may be driven without additional charge 
as permitted under the terms of the lease, and the charge per mile for the miles driven in excess of that permissible mileage; 

(9) The liability of the lessee in the event the motor vehicle is damaged, stolen or otherwise lost. In the event the motor vehicle
is damaged, stolen or lost and is deemed a total loss by the insurance company, and the lease contains a provision whereby the
difference between the insurance proceeds and the amount due under the terms of the lease shall be waived if the lessor receives
the insurance proceeds and if the lessee has otherwise complied with all other promises contained in the lease (including, where 
applicable, the requirement that the lessee pay the deductible under any insurance coverage), the lease shall disclose that the 
lessee shall have no further liability. Otherwise, the lease shall disclose the option on the part of the lessee to purchase from the
lessor or from a third party, either insurance or damage waivers, if available, to indemnify him for the difference between the
insurance proceeds and the amount due under the terms of the lease; 

(10) The gross capitalized cost of the vehicle, the capitalized cost reduction and the adjusted capitalized cost when the cost of the
 vehicle for the purpose of calculating the gross capitalized cost exceeds the manufacturer's suggested retail price; and 

h. Shall provide the following information concerning the motor vehicle to be leased: 

(1) If the odometer reads in excess of 1,000 miles, an explanation of the prior use of the motor vehicle using the following terms, 
as applicable: personal, family or household, demonstrator, livery, daily rental, police, prior wreckage, unknown; provided that
 the lessor may insert "unknown" only if the lessor does not know the prior use of the motor vehicle; 

(2) The odometer reading at the beginning of the lease term;

(3) The make, model, and year;

(4) The number of engine cylinders;

(5) Whether the transmission is automatic or manual;

(6) Whether the brakes and steering mechanism are power assisted or manual; 

(7) Whether or not the vehicle is air conditioned;

(8) The vehicle identification number of the vehicle; and

(9) If the vehicle is required to have a Monroney label, the manufacturer's suggested retail price as set forth on the Monroney label. 
Disclosures, addendum 
4. The disclosures required by subsections g. and h. of section 3 of this act may be made in the lease or in an addendum to the lease.
If the required disclosures are made in an addendum to the lease, the addendum shall refer to the lease, and shall be separately 
signed by the lessee prior to signing the lease. 

56:12-64. Compliance with federal requirements as disclosure 
5. Compliance with the requirements of the federal "Consumer Leasing Act of 1976," Pub. L. 94-240 (15 U.S.C. s.1667 et seq.) 
and Federal Reserve Board Regulation M, 12 CFR s.213, to the extent that they are substantially similar to the requirements of this act,
as the same may be amended from time to time, shall constitute compliance with subsections f. and g. of section 3 of this act. 

56:12-65. Default; death of lessee 
6. a. If a lessee is 15 days or more in default of the periodic payments due on the lease and the lessor wishes to declare a default 
and cancel or terminate the lease, the lessor shall personally deliver to the lessee or send by first class, certified mail at the lessee's last known address as shown on the records of the lessor, a notice of cancellation. A lessee who is in default under a lease solely for failure to make a payment required by the lease shall have the right to reinstate the lease, subject to the provisions of this section. If the lessee has the right to reinstate the lease, the notice of cancellation shall provide that the lessee has 15 days to reinstate the lease by paying all past due periodic payments, late fees and other amounts due under the lease, and, if the motor vehicle has been repossessed, the cost to the lessor of repossessing, storing and transporting the motor vehicle. Such costs may include a reasonable attorney's fee and court costs, if actually incurred by the lessor and if provided for in the lease. Upon payment within the 15-day period to the lessor of the amounts due, the lessor shall reinstate the lease as if the lessee had not been in default of payment. The lessor shall not be required to reinstate a lease more than once during the term of the lease. The lessee has no right to reinstatement if the default is for any reason other than or in addition to the failure to make a payment required by the lease. 

b. In the event of the death of a lessee before the expiration of a lease, there shall be no default if the lessee's surviving spouse 
continues to make payments to the lessor in accordance with the terms of the lease notwithstanding the death of the lessee. 

Appraisal for repair or replacement of parts, or reduced value 
7. a. Where the lessee is liable at the end of the lease term for charges for excessive wear and damage to the motor vehicle, 
the lease (or the addendum) shall contain a statement that the lessee may obtain at the end of the lease term, at the lessee's expense, a professional appraisal of the amount required to repair or replace parts or the amount which the excessive wear and damage reduces the value of the vehicle. This professional appraisal shall be performed by an independent third party agreed to by the lessee and the lessor, which appraisal shall be final and binding on the parties. 

b. Within 10 business days of the return of the motor vehicle to the lessor, the lessor shall mail or deliver to the lessee an invoice
 for amounts claimed by the lessor for excess wear and damage. The invoice shall contain in 10 point bold face type a notice of the lessee's right under subsection a. of this section to obtain an independent appraisal of excess wear and damage. The notice shall also provide that: (i) the lessor must be advised in writing within seven business days following the earlier of the date of the mailing or delivery of the invoice if the lessee elects to obtain an independent appraisal; (ii) any such appraisal must be conducted within ten business days following the date that the lessor is notified of the lessee's election; and (iii) that if the lessee fails to notify the lessor within the time allotted that the lessee has elected an independent appraisal, the lessor's invoice will be deemed to be final and binding on the parties. 

c. Within 15 business days after the lessee's obligations under the lease have been determined and satisfied, which shall include 
but not be limited to, the lessee's liability for excess wear and damage under this section, the lessor shall credit to the lessee's 
account or mail to the lessee any refund of any security deposit due to the lessee. 

d. Nothing in this section shall limit the lessee's obligation for any charge for excess mileage as provided in the lease. 

 

56:12-67. Credit check on lessee; right to review contract 
8. a. No leasing dealer may permit a prospective lessee to take possession of a motor vehicle subject to a lease if such lease is
contingent upon the approval of the lessee's credit unless the lessee is provided with, and acknowledges receipt of a notice on a separate page from any other notice, term or condition of the lease, which provides substantially the following: NOTICE: YOUR LEASE IS SUBJECT TO CREDIT APPROVAL. IF YOUR CREDIT IS NOT APPROVED YOU MUST RETURN THE VEHICLE. The notice may contain the name, address, phone number and logo of the leasing dealer, and shall contain an acknowledgement by the lessee of the receipt of the notice. 

b. (1) No lease shall bind a lessee or lessor unless both the lessee and lessor have had one business day to review the lease contract
before the signing of the contract. 

(2) No leasing dealer may permit a prospective lessee to take possession of a motor vehicle subject to a lease unless the lessee
is provided with a conspicuous notice which provides substantially the following: NOTICE: THE LESSEE AND THE LESSOR SHALL BE ENTITLED TO REVIEW THE CONTRACT FOR ONE BUSINESS DAY BEFORE SIGNING THE CONTRACT IMMEDIATELY ADJACENT TO THE SIGNATURE LINE OF THE CONTRACT. 

c. The leasing dealer shall complete the credit check of the prospective lessee within 5 business days of both the leasing dealer 
and lessee signing the lease. 

L.1994,c.190,s.8. 

56:12-68. Consumer awareness program 
11. The director shall implement a consumer awareness program which shall advise consumers of the requirements, protections 
and benefits provided by this act. 

Rules and regulations 
12. The director shall promulgate rules and regulations pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.) as may be needed to effectuate the purposes of this act. 

L.1994,c.190,s.12. 

56:12-70. Violations as unlawful practices 
14. It is an unlawful practice and a violation of P.L.1960, c.39 (C.56:8-1 et seq.) to violate any provision of this act. 

L.1994,c.190,s.14. 

56:12-71. Definitions 
1. As used in this act:

"Buyer" means a person who buys or leases a motor vehicle under a conditional sale contract. 

"Conditional sale contract" means any contract for the leasing of a motor vehicle between a buyer and a seller, with or without 
accessories, by which the lessee agrees to pay as compensation for use a sum substantially equivalent to or in excess of the 
aggregate value of the vehicle and its accessories, if any, at the time the contract is executed, and by which it is agreed that
the lessee will become, or for no other or for a nominal consideration has the option of becoming, the owner of the vehicle upon 
full compliance with the terms of the contract. 

"Lease contract" means a contract for or in contemplation of the lease for the use of a motor vehicle, and the purchase of services incidental to the lease, for a term exceeding four months primarily for personal, family, household, business or commercial purposes, whether or not it is agreed that the lessee bears the risk of the motor vehicle's depreciation. 

"Lessee" includes a bailee and means a person who leases, offers to lease or is offered the lease of a motor vehicle under a 
lease contract. 

"Motor vehicle" means any vehicle required to be registered under Title 39 of the Revised Statutes. 

"Person" means an individual, company, firm, association, partnership, trust, corporation, or other legal entity. 

"Security agreement" means an agreement that creates and provides for a security interest. 

"Security interest" means an interest in personal property which secures the payment or performance of an obligation. 

"Seller" means a person engaged in the business of selling or leasing motor vehicles under a conditional sale contract. 

Restrictions on subleasing 
2. a. No person shall arrange, for compensation, the transfer, assignment or sublease of any right or interest in a motor vehicle 
subject to a lease contract, conditional sale contract or security agreement unless the transfer, assignment or sublease is made 
in compliance with the terms of the lease contract, conditional sale contract or security agreement. 

b. This prohibition shall not apply to a person who is a party to the lease contract, conditional sale contract or security agreement. 


56:12-73. Enforceability of agreements 
3. This act shall not affect the enforceability of any provision of any lease contract, conditional sale contract or security agreement 
by any party thereto. 



56:12-74. Violations 
4. Any violation of the provisions of this act shall constitute an unlawful practice pursuant to section 2 of P.L.1960, c.39 (C.56:8-2)