Leased Vehicles Under Tennessee Lemon Law

Leased vehicles are covered by Tennessee’s Lemon Law (§ 55-24-101) on the same terms as purchased vehicles. The lessee — not the lessor — is the protected “consumer” under § 55-24-101.

Lease coverage under § 55-24-101

Lessee is the protected consumer.
Lessor (bank / finance company) has no Lemon Law standing.
Manufacturer is the Lemon Law defendant.
Lease term + warranty period define the Rights Period.

What’s recoverable in a leased-vehicle refund

§ 55-24-103 refund covers:

All lease payments made to date.
Sales tax paid on lease payments.
Capitalized cost reduction / down payment.
Acquisition fee.
Disposition fee (waived).
Excess mileage / wear charges (waived).
Incidental damages.

Plus the lease is terminated with no further obligation to the lessee.

Lease termination process

After award:

Manufacturer pays the lessor the residual.
Lessee surrenders the vehicle.
Lessor releases the lessee from further obligation.
Lessee receives the lease-payment refund.

Replacement under lease

If lessee chooses replacement:

New lease on comparable vehicle.
Original lease terms preserved (monthly payment, term, residual).
Sales tax credit transferred.

Common lease scenarios

Captive financing (manufacturer’s lease arm)

Nissan Motor Acceptance, Toyota Financial Services, GM Financial, Ford Credit, etc.
Lemon Law process is generally smoother because manufacturer + lessor are corporate affiliates.

Third-party lessor

Independent bank or leasing company.
Manufacturer must coordinate with third-party lessor for payoff.
May add 30-60 days to processing.

TCPA application

TCPA applies to lease deceptive practices:

Misrepresentation of lease terms.
Hidden fees in lease agreement.
Lease vs. purchase steering without proper disclosure.
Deceptive end-of-lease charges.

Bottom line

Leased vehicles get the same Lemon Law protection under § 55-24-101 as purchased vehicles. The refund covers lease payments + tax + fees + incidental damages plus terminates the lease. The 1-year Rights Period applies to leases too.

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