§793. Rent with option-to-purchase program
A. As used in this Section:
(1) "Consummation" means the time a renter becomes contractually obligated on a vehicle rental purchase agreement.
(2) "Default" means the failure of a rental consumer to bring the rental account current within five days after the rental payment is due or the failure of the rental consumer to maintain minimum insurance required pursuant to a rental purchase agreement.
(3) "Processing fee" means those administrative fees that a rental dealer may charge to a rental consumer to initiate a rental purchase agreement, however designated.
(4) "Rental consumer" means a natural person who rents with an option-to-purchase a used motor vehicle under a vehicle rent with option-to-purchase agreement.
(5) "Rental purchase agreement" means a vehicle rent with option-to-purchase agreement for the rent of a used motor vehicle by a rental dealer in favor of a rental consumer, for personal, family, or household purposes for a period of not less than twelve months.
(6) "Rent-to-own dealer" means a used motor vehicle dealer who rents used motor vehicles under a rental purchase agreement.
B. All rental purchase agreements are required:
(1) To be made in clear and conspicuous language.
(2) To be in writing, a copy of which shall be delivered to the rental consumer.
(3) To have a condition report which sets forth in detail the physical condition and appearance of the vehicle prior to rental which shall be completed and signed by both the rental consumer and an authorized representative of the rental dealer and promptly delivered to the rental consumer.
(4) To have provisions substantially equivalent to the following:
(a) A provision indicating the description of the vehicle rented, particularly to the year, make, model, vehicle identification number, color, and odometer reading.
(b) A provision itemizing all costs relative to detail, delivery, or destination of the vehicle, which shall not exceed the sum of one hundred fifty dollars.
(c) An itemization of the processing fee charged by the rental dealer, if any, which shall not exceed the sum of one hundred fifty dollars.
(d) A provision indicating the amount of the security deposit required by the rental dealer and the conditions under which the said security deposit shall be refundable or nonrefundable; however, no security deposit shall exceed the rental dealer's documented cost of the vehicle.
(e) A provision that the rental dealer cannot add repair costs to the rental purchase agreement. Further, that the rental dealer shall warrant the power train of the motor vehicle for any defects which existed at the time of sale for a period of thirty days or one thousand miles, whichever is the lesser.
(f) A provision offering to the rental consumer the right to secure a warranty, if one is available, for the used motor vehicle and the price of such warranty, and the cost of any deductible under the warranty.
(g) A provision setting the total amount of payments due, the number of total periodic payments, and the amount of each such periodic payment.
(h) A provision indicating whether the title transfer and licensing fees are included in the payments charged at consummation by the rental dealer or are to be considered additional charges.
(i) A provision indicating whether a late payment is due from the rental consumer after a certain date selected for periodic payment, the amount of which payment shall not exceed the sum of fifty dollars or ten percent of the monthly payment price, whichever is less.
(j) A provision indicating whether a reinstatement fee shall be required in the event that the rental consumer fails to make timely rental payments and desires to reinstate the rental purchase agreement, which reinstatement fee shall not exceed the sum of fifty dollars plus any legitimate recovery fees or expenses.
(k) A provision indicating whether the rental consumer is liable for loss or damage to the rental property and, if so, the maximum amount for which the rental consumer may be liable.
(l) A provision containing the rights of the rental consumer to terminate the rental purchase agreement and the consequences of such termination, if any.
(m) A provision regarding the maintenance and repair of the rental during the rental term and whether the rental consumer is responsible for such repairs absent the purchase of a warranty.
(n) A provision indicating whether the rental consumer is required to secure automobile liability insurance from a licensed insurance agent in the state of Louisiana, and the minimum limits required by the rental dealer for both bodily injury and property damage, which in any event shall not be less than minimum limits required by state law.
(o) A provision that when a rental consumer is in default on his rental purchase agreement, the rental dealer will mail a notice of default to the rental consumer, provided there is proof of mailing giving the consumer five days to bring the account current.
(p) A provision that when the rental consumer returns the vehicle that the dealer shall do a condition report at the time of the vehicle's return which sets forth the physical condition and appearance of the vehicle and which shall be completed and signed by an authorized representative of the rental dealer and the rental consumer and promptly delivered to the rental consumer.
C. A rental purchase agreement may not contain a provision:
(1) Requiring a confession of judgment.
(2) Authorizing a rental dealer or an agent of the rental dealer to commit a breach of the peace in the repossession of rental property or to take repossession of the rental property in any manner other than what is permitted in R.S. 14:220.
D. Every rental dealer shall maintain a contingent automobile liability policy of insurance with minimum limits of one hundred thousand dollars per occurrence, three hundred thousand dollars aggregate, and fifty thousand dollars in property damage. It shall not be sufficient for any rental dealer to share in a policy of insurance, which could, under any circumstance, create a limit of less than that set forth herein. Such policy may be surplus lines insurance as defined in R.S. 22:46.
E. A used motor vehicle dealer shall not rent with an option to purchase a used motor vehicle that has a recorded lien on file. The lien shall be removed through the office of motor vehicles prior to placing the used motor vehicle in the rental program. A used motor vehicle dealer shall only rent with an option-to-purchase vehicle which shall be properly titled in the name of the used motor vehicle dealer.
Acts 2006, No. 440, §1; Acts 2012, No. 136, §1; Acts 2014, No. 430, §1.