HOLIDAY ALERT: Attorney General Balderas Issues Warning to Consumers Regarding Lease-to-Own Schemes

FOR IMMEDIATE RELEASE: December 21, 2017

Contact: James Hallinan (505) 660-2216

Albuquerque, NM – Attorney General Hector Balderas issued a warning today to consumers who are planning to or have purchased a vehicle, major appliances, furniture, or other large items this holiday season.

“Some local car dealers and retailers are running ads that make it seem like they are selling their products at very low prices, but in reality these dealers and retailers are looking to sign customers up for very expensive lease or lease-to-own agreements instead,” Attorney General Balderas said. “We’ve seen some consumers paying three or four times what the product is actually worth, and they don’t even own the product at the end of the lease.”

Leases are different from a typical sale because the seller, not the consumer, continues to own the product during the lease term and the consumer usually must either return the product after the lease is up or pay a balloon payment to purchase the product.

Lease agreements are nothing new, but retailers and auto dealers are substituting them for typical financing agreements more and more, especially when targeting low-income consumers who may not qualify for a typical sale on credit. Consumers not familiar with the differences between leases and credit sales can be easily confused, especially when a retailer or auto dealer is not clear about whether a particular transaction is, in fact, a lease or a sale. To further muddy thewaters, certain lease-to-own agreements (leases that allow a consumer to purchase the leased product at the end of the lease for little or no money), are often treated as credit sales under certain federal lending laws.

In the case of automotive leasing, state regulations that require dealerships to disclose prior wreck damage and accident histories may not apply to vehicles that are leased rather than sold. “Consumers must read the fine print when it comes to these types of deals, as they may end up paying a lot of money to lease, not even to own, a high-mileage vehicle that’s worth very little because of prior accidents that the dealer never disclosed,” said Attorney General Balderas.

Consumers who believe they have been misled by any retailer or automotive dealer are encouraged to fill out and submit an online complaint form, which can be found at or call 505-717-3500.