June 18, 2004
Vicarious liability costs New York consumers and businesses millions
New York’s “vicarious liability law” costs consumers more than $130 million a year and has led to a 36 percent decline in the number of vehicles leased in New York each year, according to the Alliance of Automobile Manufacturers (Alliance) and the Greater New York Automobile Dealers Association (GNYADA).
The three organizations are leading the fight to repeal the antiquated law that allows lessors of cars to be sued along with the lessee if the lessee gets into an accident.
“New York is now the only state with unlimited vicarious liability,” said a fact sheet posted on the Automobile Dealer Association website. “Connecticut and Rhode Island repealed their vicarious liability laws in 2003.”
In a report released June 15, the group said that “car buyers and lessors in New York paid an additional $132,507,391 since automakers and banks began pulling out of leasing in May 2003. These additional costs are derived from the extra sales taxes paid by consumers who were forced out of leasing and by the higher lease acquisition fees that New York consumers are charged.”
The higher costs means a loss to consumers, the group said. Leasing used to allowed consumers to drive newer and safer vehicles for a reasonable price.
In addition, the group said, vicarious liability has caused “unacceptable losses” for leasing companies and contributed to the closing of 70 leasing companies since September 2000.
The group is supporting legislation, A.1042, currently working its way through the state Assembly that would eliminate leaser liability in the case of a negligent driver, for whom the leasing company is not responsible. The same legislation would ensure the lessor does remain liable for defective parts.
“Last year, more than one- fourth of the vehicles purchased in the state of New York were financed by leasing,” said Bob Vancavage, president of the New York State Auto Dealers Association. “Since GM left the leasing business in May, a number of our dealers have seen a significant drop-off in their business. We are very concerned that if action is not taken before the legislature adjourns many of our dealers – as well as other small businesses and consumers who rely on leasing – will be financially devastated.”
For more information on repealing vicarious liability, visit www.saveleasing.com.