Sec. 20. Total loss notice and waiver of the gap amount.

482 words·~2 min read·/il/chapter-815/act-636/20

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

(a)If the consumer lease provides that the lessee shall be responsible for the gap amount, the consumer lease shall disclose that fact and disclose the obligations for which the lessee would remain liable in the event of a total loss of the vehicle prior to the end of the lease term occasioned by its theft, physical damage, or other occurrence as specified in the consumer lease, using the term "gap amount".

(b)The lessor may waive its contractual right to hold the lessee liable for some or all of the gap amount. This waiver may be granted either without a separate charge to the lessee, or in exchange for the payment by the lessee of a separate charge. Any separate charge for the waiver must be conspicuously disclosed to the lessee.

(c)If the lessor under subsection

(b)of this Section offers for a separately stated charge to waive its contractual right to hold the lessee liable for the gap amount, the lease shall also contain a conspicuous notice which shall

(1)state that for a separate charge disclosed in the notice the lessor will waive its contractual right to hold the lessee liable for the gap amount and

(2)state that the lessee may as an alternative to purchasing a waiver, be able to purchase protection covering the gap amount from a company which has been authorized to do business in this State. Failure to provide the notice as required by this subsection shall invalidate any lease provision which otherwise would obligate a lessee to pay to the holder or lessor, after a total loss of the vehicle occasioned by its theft, physical damage or other occurrence as specified in the consumer lease, any of the items specified in paragraphs

(5)and

(6)of subsection

(b)of Section 45 of this Act. No consumer lease shall be conditioned upon the lessee obtaining vehicle lessee gap protection.

(d)The lessor's waiver of its contractual right to hold the lessee liable for the gap amount may be conditioned upon the receipt by the lessor of

(1)all amounts due under the consumer lease as of the date of receipt by the lessor of the insurance proceeds or equivalent amount as specified in the lease or if no such date is specified, as of the date of total loss of the vehicle,

(2)an amount from the lessee equal to the amount of the lessee's deductible and any other subtractions from the actual cash value under the lessee's insurance policy, and

(3)insurance proceeds from the insurance policy required under the lease or the equivalent amount of the value of the vehicle.

(e)No insurance or other additional license shall be required of lessors who waive or offer to waive their contractual right to hold the lessee liable for the gap amount.