Leasing is Back in New York

Prior to a new federal law going into effect last year, New York had an antiquated "vicarious liability" law on the books that held car leasing companies partly liable when one of their leased vehicles was involved in an accident that caused injury or death. The new federal law bans such state laws.

Before the new law, lease companies, including all the major car manufacturers' "captive" finance companies either stopped doing lease business in New York, or increased consumer fees to offset some of potential losses. New York already had the reputation (and still does) of being one of the least "lease friendly" states in the country, primarily because of the way it taxes leases. So, for a period of a few years, the leasing rate in New York was far lower than in the rest of the U.S..

The battle may not be over yet. We can anticipate the new federal law to be challenged in existing and future court cases. Only time will tell.