Chrysler has become the latest carmaker to pull out of leasing in New York state due to a law that holds the leasing company rather than the driver liable for accidents.

Chrysler Financial, a unit of DaimlerChrysler Services North America, on Friday said it will no longer offer leasing from May 1 because New York remains the only state in the country that has failed to amend or repeal its antiquated unlimited lessor vicarious liability law.

Under the existing law in New York the "owner" of a motor vehicle is responsible for personal injury and property damage caused by the driver of a leased vehicle, regardless of any fault or responsibility of the leasing company. With leasing, the finance company holds the title to the vehicle and therefore has significant exposure under the existing vicarious liability statutes.

"The current legislative environment in New York has forced us to exit based on the significant financial exposure we risk if we continue to offer leasing in this market," said Klaus Entenmann, vice president - Chrysler Financial.

"Chrysler Financial has made every effort, along with the New York State Automotive Dealers Association and the Alliance of Automotive Manufacturers, to encourage changing legislation in the state of New York to no avail," he added.

Chrysler Financial may re-enter the leasing market if the law is changed.