First National's consumer leasing department placed an ad in the local paper that pictured a car with the caption, "Sign a lease with us and pay only $275 per month." What other information must this ad have?
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A. B. C. D.B
When advertising a consumer lease, there are specific federal regulations and requirements that must be met to ensure consumers are fully informed about the terms and conditions of the lease agreement. The ad in the question states that the consumer can lease a car for $275 per month. However, this ad is missing important information that is required by law.
The correct answer to the question is B. The ad must disclose the total amount due at consummation or delivery, the number of payments required, and any required security deposit. These are essential details that enable the consumer to understand the full cost of the lease agreement, including any upfront fees and the total number of payments required.
In addition to the information required by answer B, there are other important disclosures that must be made in a consumer lease advertisement. One of these is the disclosure of required insurance, which is answer D. Lessees must maintain certain types and levels of insurance coverage during the lease term, and this must be clearly communicated in the ad.
Answer A, stating that the transaction is not a loan, is not required to be included in the ad, but it can be a helpful disclosure to clarify the nature of the agreement and avoid confusion for consumers.
Answer C, the bank's policy regarding the purchase of the property by the lessee, is not necessary to be included in the ad, but it is a useful disclosure to make in the lease agreement itself. It clarifies the lessee's rights and obligations regarding purchasing the property at the end of the lease term, and it can help the lessee to make an informed decision about whether to lease or buy the property.
In summary, a consumer lease advertisement must disclose the total amount due at consummation or delivery, the number of payments required, any required security deposit, and required insurance. Clarifying that the transaction is not a loan can also be helpful, but it is not required. The bank's policy regarding the purchase of the property by the lessee is not necessary to be included in the ad, but it can be included in the lease agreement itself.