Oaks Calls For Reform of ’Vicarious Liability’ Law

February 3, 2005

Assemblyman Robert Oaks (R,C-Macedon) joined with Assembly colleagues from around the state to call for reform of an antiquated state law that costs New York consumers millions of dollars each year and is making it increasingly difficult to lease an automobile in the state.

"We need to immediately overturn the state’s vicarious liability law that has largely driven auto leasing out of New York," Oaks said.

According to Oaks, New York is the only state in the nation to hold lessors of automobiles liable for the negligent acts of their lessees. Under the state’s vicarious liability law, car accident victims can sue the financial companies that provide auto leases even though the companies are in no way responsible for the accidents.

Oaks explained that vicarious liability claims between January 2000 and June 2003 totaled more than $6.5 billion. Since then, nearly 20 automakers and every major retail bank have stopped or limited leasing in the state, including Chase Auto Finance, General Motors, Ford Motor Company, DaimlerChrysler, Buick, Cadillac, Chevrolet, Dodge, Hummer, Hyundai, Jeep, Oldsmobile, Pontiac, Porsche and Subaru.

New York consumers have paid out more than $132 million since the automakers and banks began pulling out of leasing in the state. The additional costs are derived from the extra sales taxes paid by consumers forced out of leasing and by the high lease acquisition fees that New York consumers are charged. Leasing of new cars in New York has decreased by 36 percent.

"In the 128th Assembly District, including Wayne, Cayuga and Oswego counties, and throughout New York state, the only way for many families of modest means to afford a new or reliable car is through a lease," said Assemblyman Oaks. "The Legislature needs to repeal the vicarious liability law now so that people who find leasing their best option can once again have a reasonably priced lease option in New York state."