The Big Three US automakers on Wednesday told Reuters they would resume leasing vehicles in New York after President Bush signed a federal transportation bill that included a measure to repeal a state law holding leasing companies liable for accidents and damage.

Go deeper with GlobalData

Data Insights

The gold standard of business intelligence.

Find out more


The report said representatives of General Motors, Ford and DaimlerChrysler’s Chrysler unit all plan to return to the leasing market by next month while Mercedes Benz said last week it would lower its fees, anticipating the law’s repeal.


While most auto manufacturers stopped leasing in New York altogether in recent years, some had replaced leases with “balloon financing” arrangements, Reuters noted. Under those deals, consumers technically own the cars – removing auto companies from liability in case of accidents – but get the same general payment terms as they would under a lease. Consumers did not make out as well under the balloon financing deals as they would under a traditional lease, and had to pay almost three times as much per month in New York than in the rest of the nation.


Mark Shienberg, president of the Greater New York Automobile Dealers Association, told Reuters the law had cost consumers more than $US280 million and eroded consumer choice, as leases make up at least 60% of most auto dealers’ sales.


The news agency said the state law was designed to protect the chauffeurs of wealthy car owners, but the auto industry had considered the 1924 measure antiquated and unfair – Rhode Island and Connecticut removed similar liability statutes two years ago, leaving New York as the only state with such a “vicarious liability” law.

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.

Company Profile – free sample

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 GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

However, Shoshana Bookson, immediate past president of the National Association of Trial Lawyers of America, told Reuters the change will not financially benefit consumers, as auto dealers and manufacturers claim.