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Consumer Motor Vehicle Leasing Contracts - Financial Regulation

Last reviewed or updated: August 6, 2024

A Consumer Motor Vehicle Lease Agreement is a contract, typically in the form of a lease, for an individual’s use of a motor vehicle primarily for personal, family, or household purposes, for a period of time exceeding 4 months, including renewal periods, 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. Refer to Md. Code Ann., Com. Law § 14-2001(g). 

A Consumer Motor Vehicle Lease Agreement must be in writing and signed by the Lessor and the Lessee. Refer to Md. Code Ann., Com. Law § 14-2002 for specific requirements regarding the content and prohibitions applicable to Consumer Motor Vehicle Lease Agreements.

A person leasing motor vehicles to consumers may not:

  1. make any false, falsely disparaging, or misleading oral or written statement, visual description, or other representation of any kind that has the capacity, tendency, or effect of deceiving or misleading a consumer or lessee;
  2. by any means advertise or offer to the public any motor vehicle without intent to lease it as advertised or offered;
  3. misrepresent a lease of a motor vehicle as a sale;
  4. fail to include any dealer processing or freight charges in determining the adjusted capitalized cost used to calculate the base lease payment shown in an advertisement for a leased vehicle; or
  5. advertise to the general public a capitalized cost reduction to the lessee unless the capitalized cost reduction is offered to all potential lessees. Refer to Md. Code Ann., Com. Law § 14-2003.

A Lessor may repossess a motor vehicle leased by a consumer by legal process or self-help (without use of force) if the lessee is in default or a law enforcement agency has seized the motor vehicle and will not unconditionally return the motor vehicle to the lessor. If a Lessor repossesses a motor vehicle leased by a consumer, the consumer generally has certain redemption rights under Maryland law.  Refer to Md. Code Ann., Com. Law § 14-2008. 

NOTE: The Commissioner may enter an order disallowing any claim for a deficiency balance against the consumer following the private sale of a repossessed motor vehicle previously leased by the consumer if the Commissioner determines that the sale was not accomplished in a commercially reasonable manner. Refer to Md. Code Ann., Com. Law § 14-2009.

Laws, Rules, and Regulations

Consumer motor vehicle Lessors are expected to be knowledgeable about and in compliance with their obligations under Maryland law when entering into Consumer Motor Vehicle Lease Agreements or repossessing motor vehicles thereunder, and any other applicable State or Federal statutes, rules, and regulations.

Maryland laws, rules, and regulations can be found by accessing the Annotated Code of Maryland and Rules and Code of Maryland Regulations (COMAR). Certain relevant Maryland laws, rules, and/or regulations include, but are not necessarily limited to: