Ford Credit today announced that it plans to exit automobile leasing in New York after July 9, 2003, in response to an outdated law that holds finance companies responsible for accidents involving their leasing customers.
New York's vicarious liability law has resulted in large payouts by finance companies to resolve litigation, yet the New York legislature failed to act on a bill that would have brought the state in line with the vast majority of U.S. states even though the New York Senate recently passed a bill eliminating legal exposure for finance companies.
"We are very disappointed that the New York legislature adjourned without addressing this important issue. As a result, New York may soon be the only state in the nation where leasing is not an option for consumers," said A.J. Wagner, Ford Credit's Executive Vice President of North America. "While we are encouraged that the Connecticut legislature recently passed a bill to limit vicarious liability, we have not seen a similar commitment in New York."
We fully and actively support the legislative reform effort; however, we need to limit our exposure as it continues under the present law in New York, Wagner said, adding that the Rhode Island legislature is set to consider a vicarious liability bill this week.
A New York jury recently rendered a $1 million verdict against Ford Credit after a young girl sued her father -- and the finance company -- when her father, driving his leased car, ran her over while she was sunbathing. Finance companies, banks and independent auto leasing companies face several billion dollars in potential payouts involving hundreds of open vicarious liability lawsuits. These payouts continue to add to the costs of purchasing, leasing and insuring vehicles.
With companies such as Ford Credit and several others canceling leasing programs, consumers will be faced with fewer and more expensive financing options. Consumers will not be able to lease Ford or Lincoln Mercury vehicles from Ford Credit in New York after July 9. Consumers who have already purchased a Red Carpet Lease will not be impacted.
A growing list of supporters of vicarious liability reform now includes the United Auto Workers (UAW), Automobile Association of America (AAA), the New York State Bar Association, and Ford and Lincoln-Mercury dealers.
Ford Credit is a wholly owned subsidiary of Ford Motor Company and is the world’s largest automotive finance company. Now in its 44th year, Ford Credit provides vehicle financing in 36 countries to more than 11 million customers and more than 12,500 automotive dealers. More information can be found at www.fordcredit.com
and at Ford Credit's investor Web site, www.fordcredit.com/investorcenter/