Case By Case

Warranty for Leased Cars

In a victory for consumers, an Illinois court recently ruled that a person who leases a car has the same warranty rights under federal law as do people who buy their cars. The case involved a couple who leased a car from a Nissan dealer. After the couple had leased the car, the local dealership transferred title to the car to a Nissan subsidiary that owns the cars that Nissan leases. Soon after signing the lease, the car began to have serious problems with the engine and brakes, but Nissan would not repair it.

The couple went to court to invoke their rights under the Magnuson-Moss Warranty Act, a federal law that allows buyers to revoke their acceptance of goods when a warranty has been breached. The Illinois court ruled that the couple could bring a claim under the Act. Although the car was technically owned by a subsidiary of Nissan, the couple had the sole right to use the car for the period of the warranty and, therefore, they were "consumers" under the Act. The court also noted that it would serve no purpose to treat warranty claims of people who bought their cars differently from warranty claims of those who signed long-term leases for their cars.

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