New York’s Automobile Leasing Law Is Archaic

June 3, 2005

State consumers are getting less bang for their buck with car leasing having gone the way of the dinosaur in New York state.

The state’s outdated vicarious liability law has become a major impediment to many working families looking to drive safe, reliable vehicles at reduced costs compared to buying cars. Additionally drivers pay higher sales taxes for purchasing a vehicle compared to leasing it, and pay higher auto insurance premiums.

The bottom line is that in most cases, leasing companies are refusing to write leases in New York and the current law needs to be changed to be more consumer friendly.

The existing law dates to more than 80 years ago when insurance regulations were very different. The once useful law applied to vehicles that were chauffeur-driven or owned by livery companies. Hired drivers often could not afford to pay for damages if they caused accidents while on the job. To protect accident victims, the burden fell on the livery companies or vehicle owners to compensate victims because they were more likely to have the money to pay for the injuries or damages.

Today, residents in every other state in the nation enjoy the benefits of leasing vehicles, such as the opportunity to drive trustworthy vehicles at a fraction of the cost of buying new cars. That opportunity has diminished in New York due to the vicarious liability law. Because the titleholder of a leased vehicle is the company supplying the lease, the company – not the driver – can be sued in New York for accidents they did not have control over or cause.

Unfortunately, for New Yorkers, leasing companies are disgusted with paying expensive decisions and settlements for accidents caused by drivers. Accidents are the fault of the drivers, not the leasing company. Attorneys take advantage of the vicarious liability law by suing the leasing companies because they have more money. Today, it’s difficult to find a company, financial institution or auto manufacturer that will provide automobile leases in New York. Companies no longer leasing in New York include Chase Auto Finance, General Motors, Ford Motor Company, DaimlerChrysler, Buick, Cadillac, Chevrolet, Dodge, Hummer, Hyundai, Jeep, Oldsmobile, Pontiac, Porsche and Subaru.

I am calling for repeal of this archaic vicarious liability law. I am hopeful that New York can join the other 49 states by removing this antiquated law from the books and invite auto dealers to once again lease out vehicles in our state.