Article on the end of car leasing in New York.(long) - Saab General Bulletin Board - Saabnet.com
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A while back we discussed the NY state liability law that was being used by trial lawyers to seek huge settlements from leasing companies as they were the technical owner of the vehicle that did the damage to the plaintiff. The hook was the "vicarious liability" laws wherein those hurt can sue the owner (not necessarily the driver) of the car and win without having to prove that the owner is at fault. The original 1920's application of the law was to protect plaintiffs from the defense of a chauffuer driving the car as the limit of liability - long before leasing was common in commerce.
If the owner is also the driver, well, its a moot point. But if the driver leases and title to the car is in Chase, GMAC or Ford Motor Credit's name, then the lawyers go after the deep pocket under the technicality in the law. Ironically, leasing companies cannot even access driver records to ascertain if they should be doing business with the driver, so they can't even adopt a defensive posture to this.
An article in today's New York Post stated that GM, Ford and Honda will stop writing leases as of July 1 unless the state assembly puts a cap on such awards. It further states that the substitute balloon payment purchase programs to replace the traditional leases is more expensive to the consumer (although they didn't say how). Many of the banks in New York have already dropped car loan and leasing programs because of the law.
Some of the absurdities under the NY law: when the Yankees manager Billie Martin was killed in upstate NY several years back in a one car accident , the family sued Ford Motor Credit under this law, even though a family friend was eventually convicted of drunken driving (article does not state if there was a payout in the suit).
The article further states that the New York State Trial Lawyers Association attacked the leasing companies recently for complaining about the law, charging "poor management" as there were only a handful of cases (215) before the courts. They neglected to mention that those 215 cases seek $1.5 BILLION in damages. How high would fees and rate markups have to go to cover that business cost?
Only three states had similar laws; NY, CT and RI. Bills have been passed in CT and RI and will eventually become law so that those two state's laws parallel the other 47 states which do not attribute driver actions to the technical owners of the assets. Only New York is sticking to this insanity.
New York is probably the home state of "The Lawyer Class" of our society. Everyone on my train but me seems to be a lawyer. If you wonder why this situation exists, the article points out that the legislative body of NY, the State Assembly, is headed by Sheldon Silver, who when not promulgating laws, is a partner in a personal-injury law firm.
I had said that lawyers are creating conditions that are a drag on the economy, this article confirms it. How can SAAB move a $41,000 Aero if everyone has to pony up a downpayment large enough to make the monthly carry work - if the advantages of leasing are killed off.? The lawyers personal gains of splitting jackpot awards with palintiffs is hurting commerce in New York. Its just wrong.
Can anybody recommend a state to move to that has fewer lawyers?
posted by 216.179.3...
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