Ford Blames Liability Law for Decision to Stop Leasing Cars in NY

April 7, 2003

The Ford Motor company’s finance division announced plans to stop leasing automobiles in New York state as of July, due to the state’s present “vicarious liability” law which holds leasing companies liable for damages arising from auto accidents.

New York, along with Rhode Island and Connecticut, holds the owners of vehicles involved in accidents liable for damages. A lessor retains this responsibility, even though they have for all practical purposes transferred responsibility for the vehicle’s operation to the lessee. Proposals to change the focus of liability have passed the NY Senate, but have not as yet been approved by the state’s legislature.

According to a report from Reuters News Agency, leasing accounts for around 25 percent of Ford’s car sales in New York. The company plans to replace the present leasing system with an outright sale on credit to the car buyer, who will then become the owner, subject to monthly payments, similar to those now made by lessees, with a “balloon” payment at the end of the loan period.

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