Auto Leases Will Become Less Complex

Effective Jan. 1, the language of complex and confusing car-leasing contracts will have to be simplified.

After a long delay, the Federal Reserve Board and the Federal Trade Commission said rules requiring auto dealers to disclose information in easily understandable formats will control leases to individuals totaling $25,000 or less.

Under the new rules, dealers must tell consumers the amount to be paid over the period of the lease - not just monthly payments - and must detail all charges related to it, such as fees, taxes and insurance. Dealers also must disclose standards for wear and use, responsibilities for maintenance and the consumer’s option to buy the automobile.

The trade commission has alleged that several major automobile manufacturers and dealers violated federal law by deceiving customers in advertisements for leases and credit. The manufacturers and dealers signed agreements with the agency in November 1996.