Assemblyman David G. McDonough (R,C,I-Merrick) expressed his disappointment with Tuesday’s decision by the Assembly Transportation Committee chairman to pull a bill from the panel’s agenda that would have allowed for discussion of New York’s Vicarious Liability Law. McDonough deemed the existing statute an antiquated law that costs state consumers millions of dollars each year by making it increasingly difficult to lease an automobile.

"The Vicarious Liability Law forces New York consumers to have one less option than consumers in every other state of the nation," said McDonough. "Rather than face a constant stream of litigation, many leasing companies have chosen to abandon the New York market altogether, threatening to put an end to auto leasing here. New York consumers who are leasing automobiles have to pay higher fees, down payments and monthly installments when compared to people in other states."

McDonough is the ranking minority member of the Assembly Consumer Affairs and Protection Committee.

New York is the only state in the nation with a law that holds auto leasing companies responsible for damage caused by drivers, or lessees, as a result of accidents. Under the law, car accident victims can sue the financial companies that provide auto leases though the companies are not responsible for accidents.

Between January 2000 and June 2003, vicarious liability claims 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 more than $132 million in sales taxes and high lease acquisition fees since automakers and banks discontinued leasing in the state. The leasing of new cars in New York has decreased by 36 percent.

When New York’s law was instituted in 1924, most automobile owners were wealthy individuals or livery companies. The law was initially designed to protect the people injured by uninsured, hired drivers, and leasing was generally not available at the time.

A recent survey from the Alliance of Automobile Manufacturers revealed that New Yorkers strongly support auto leasing reform by a margin of two-to-one. An identical bill has easily passed the state Senate each of the past two years.