Ford Credit plans to exit vehicle leasing in New York in early July 2003 in response to an outdated law that holds leasing companies responsible for accidents involving their leasing customers. New York’s ‘vicarious liability’ law has resulted in large payouts by leasing companies to resolve litigation.
Go deeper with GlobalData
“We are encouraged that the New York Senate has responded to this issue by passing, with bi-partisan support, legislation that would reform vicarious liability law. We fully and actively support the legislative reform effort; however, we need to limit our exposure as it continues under the present law,” said Ford Credit executive vice president of North America A.J. Wagner.
According to Ford Credit, finance companies, banks and independent vehicle leasing companies face several billion dollars in potential payouts involving hundreds of open vicarious liability lawsuits. These payouts continue to add to the costs of purchasing, leasing and insuring vehicles.
Consumers pay more for leasing and insurance because of vicarious liability laws. With companies such as Ford Credit and others cancelling leasing programmes, consumers will be faced with fewer and more expensive financing options.
Consumers will not be able to lease Ford or Lincoln Mercury vehicles from Ford Credit in New York after the pullout; consumers who have already purchased a Red Carpet Lease – a balloon payment lease that passes title of the vehicle to a registered owner rather than the finance company – will not be impacted.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataA growing list of supporters of vicarious liability reform now includes the United Auto Workers (UAW), the Automobile Association of America (AAA), Ford dealers, the Alliance of Automobile Manufacturers, the Business Council of New York State, the National Vehicle Leasing Association, the New York State Auto Dealers Association and all metropolitan vehicle dealer associations in New York, the Truck Rental and Leasing Association, the American Automotive Leasing Association and the American Financial Services Association.
Last month, Ford Credit said it would curtail leasing in Rhode Island. General Motors has also said it would curtail leasing in New York by May 1 if the law wasn’t changed.
