Auto Leasing Back In New York
“Leasing is back in New York,” Bob Fusco, chairman of the Greater New York Automobile Dealers (GNYADA), said at a press conference in Manhattan timed to coincide with the signing of the highway bill by President George W. Bush. DaimlerChrysler, Ford Motor Company and General Motors each announced that they will return to leasing in New York at the event hosted by GNYADA and the Alliance of Automobile Manufacturers because the bill includes a provision to end vicarious liability.
Vicarious liability, the antiquated law that holds a leasing company liable for a driver’s negligence, has forced 20 automakers and every major retail bank in New York out of leasing. The removal of vicarious liability has long been an initiative of GNYADA and will bring automakers back into the business of leasing vehicles and give consumers the same choices afforded car buyers in every other state in the country.
“The actions of Congress, including New York’s Senate and House delegates, and the signing of the bill by the president today, have made this historic event possible,” Fusco said. “With the signing of this bill into law, all New Yorkers will be able to again lease vehicles. This antiquated law has hurt the retail auto industry, and we are pleased that Congress has put an end to it. This is a win-win for consumers and the industry.”
Vicarious liability is a legal concept that holds a leasing company liable for the actions of the driver of a leased vehicle. According to information released by GNYADA and the Alliance of Automobile Manufacturers earlier this year, it has cost consumers in New York more than $280 million in extra costs since 2003, and has eroded choice from the market place.
“For many years, New York became an island on which it was impossible for consumers to lease many popular vehicles. The end of vicarious liability means that New Yorkers will no longer be treated like second-class citizens,” Fusco concluded.
The Greater New York Dealers Association, a not-for-profit organization, represents 650 franchised automobile dealerships in the metropolitan area of New York, which sells more than 700,000 cars each year. Its members generate more than $1.2 billion for state and local governments and employ (directly and indirectly) approximately 54,000 individuals in metropolitan New York.