Credit Contracts and Consumer Finance Act 2003

16 Lease of goods treated as consumer credit contract

• (1) For the purposes of this Act, a lease is to be treated as a credit sale and a consumer credit contract if—

  • (a) the lessee is a natural person; and

  • (b) the lessee enters into the lease primarily for personal, domestic, or household purposes; and

  • (c) when the lease is entered into, the lessor, or one of the lessors, carries on the business of leasing goods (whether or not the business is the lessor's only business or the lessor's principal business), or makes a practice of leasing goods in the course of a business carried on by the lessor; and

  • (d) either or both of the following applies:

    • (i) the amount payable by the lessee under the lease is substantially equivalent to, or in excess of, the cash price of the goods (whether or not the lessee has an option to purchase the goods):

    • (ii) the lessee has an option to purchase the goods for no additional amount, for a nominal amount, or for an amount substantially below a reasonable estimate (calculated as at the date the lease is made) of the fair market value of the goods at the end of the term of the lease (whether or not the amount payable by the lessee under the lease is substantially equivalent to, or in excess of, the cash price of the goods).

  (2) For the purposes of this section, the amount payable by the lessee under the lease does not include—

  • (a) any amount payable for optional services or services that are incidental to the hire of the goods; and

  • (b) any amount payable to exercise an option to purchase the goods; and

  • (c) any amount that would cease to be payable on the cancellation of the lease if the lessee were to exercise a right of cancellation at the earliest opportunity.

  Compare: Consumer Credit Code (Appendix to Consumer Credit (Queensland) Act 1994) s 10(1), (4) (Qld)