What's happening
This bill allows service contracts for leased personal vehicles to cover excess wear and tear charges not otherwise covered.
Why it matters
Could help protect lessees from unexpected out-of-pocket costs. by allowing them to purchase service contracts that specifically cover excess wear and tear charges at the end of a vehicle lease—costs that often surprise people when returning a leased car.
Expands consumer options and flexibility. by enabling service contracts to cover items like tire damage, paint cracks or chips, interior stains, rips or scratches, and missing parts—areas not always included under standard warranties or existing service agreements.
May make leasing more attractive and manageable. for individuals who worry about incidental damage or normal use penalties, potentially reducing financial anxiety and making budgeting for leased vehicles more predictable.
Establishes clear limitations and protections. by specifying that any indemnity payment under these contracts cannot exceed the purchase price of the vehicle, helping to prevent excessive or abusive claims while still offering meaningful coverage.
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Who cares
Headline styles
Protect Lease Drivers' Cars
Plain English, a few words. Used as the page title.
Sponsors
2 Co-sponsors
History
- Approval memo.82
- Signed chap.736
- Delivered to governor
- Returned to senate
- Passed assembly
- Ordered to third reading rules cal.232
- Substituted for A268
- Referred to codes
- Delivered to assembly
- Passed senateVote 62–0
- Advanced to third reading
- 2nd report cal.
Show 2 earlier actions
- 1st report cal.985
- Referred to insurance
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Protect Lease Drivers from Fees
Assembly Floor Calendar · Sponsor Kevin Cahill
Full text
2 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
3631
2019-2020 Regular Sessions
IN SENATE
February 11, 2019
Introduced by Sens. BRESLIN, SEWARD, SEPULVEDA -- read twice and ordered printed, and when printed to be committed to the Committee on Insurance
AN ACT to amend the insurance law, in relation to expanding the availability of meaningful service contracts to protect New Yorkers leasing automobiles for their personal use from unanticipated "lease-end" charges related to excess use or wear and tear of the leased vehicle
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Subsection (k) of section 7902 of the insurance law, as amended by chapter 409 of the laws of 2012, is amended to read as follows:
(k) "Service contract" means a contract or agreement, for a separate or additional consideration, for a specific duration to perform the repair, replacement or maintenance of property, or indemnification for repair, replacement or maintenance, due to a defect in materials or workmanship or wear and tear, with or without additional provision for indemnity payments for incidental damages, provided any such indemnity payment per incident shall not exceed the purchase price of the property serviced. Service contracts may include towing, rental and emergency road service, and may also provide for the repair, replacement or maintenance of property for damage resulting from power surges and accidental damage from handling. Service contracts may also include contracts to repair, replace or maintain residential appliances and systems. Such term shall also mean a contract or agreement made (1) by or for the manufacturer or seller of a motor vehicle tire for repair or replacement of the tire or wheel as the result of damage arising from a road hazard, (2) by or for the supplier or seller of a service for repair of chips or cracks in a motor vehicle windshield, but not including services that involve the replacement of the entire windshield, and (3) by or for the supplier or seller of a service for repair or removal
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD03105-01-9
S. 3631 2
of dents, dings or creases from a motor vehicle without affecting the existing paint finish using paintless dent repair techniques, but not including services that involve the replacement of vehicle body panels, or sanding, bonding or painting. In conjunction with a motor vehicle leased for personal use, such term shall also mean a contract to perform the repair, replacement or maintenance of property, or to provide indemnification for repair, replacement or maintenance, due to excess wear and use or damage for items such as tires, paint cracks or chips, interior stains, rips or scratches, exterior dents or scratches, windshield cracks or chips, missing interior or exterior parts that result in a lease-end charge not otherwise covered by a service agreement or warranty, provided any such payment shall not exceed the purchase price of the vehicle.
§ 2. This act shall take effect immediately.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the insurance law, in relation to expanding the availability of meaningful service contracts to protect New Yorkers leasing automobiles for their personal use from unantic- ipated "lease-end" charges related to excess use or wear and tear of the leased vehicle
Purpose
This bill will allow New York State registered service contract provid- ers to issue service contracts that include meaningful protection from unanticipated charges at lease-end related to excess use or wear and tear of a leased vehicle.
Summary of provisions
Section 1 of the bill amends the definition of a "service contract" in Insurance Law § 7902(k). Specifically, Section 1 of the bill clarifies that, for automobiles leased for personal use, a service contract includes a contracts to perform the repair, replacement or maintenance of the vehicle (or to provide indemnification for such) due to excess wear and use or damage to items such as tires, paint cracks or chips, interior stains, rips or scratches, exterior dents or scratches, windsh- ield cracks or chips, missing interior or exterior parts that result in a lease-end charge. The lease end charge may not be otherwise covered by a service agreement or warranty and it may not exceed the purchase price of the vehicle.
Read the full memo (613 words)
Section 2 of the bill provides for an immediate effective date.
Justification
A growing number of New Yorkers are choosing to lease, rather than purchase, their personal automobiles. Leasing has become an attractive alternative due to lower initial costs, lower monthly payments, and the avoidance of maintenance and repair costs associated with long-term vehicle ownership. However, most lease contracts include terms that require the lessee to pay any costs associated with damage or excess wear and tear at the time they turn in the leased vehicle. As such, New Yorkers are at risk for any excess damage that exceeds the lessor's standards.
While damage in excess of a lessor's standards is not uncommon (e.g. a stained carpet, ripped seat, dinged paint, cloudy headlights), the cost of such damage is difficult for consumers to anticipate or budget for. Therefore, lease-end charges place some consumers in financial peril. At the same time, the potential for lease-end charges cause other consumers to avoid leasing a vehicle. New York has an existing law and regulatory infrastructure permitting the issuance of service contracts and ensuring appropriate regulatory oversight of service contract providers. However, the New York State Department of Financial Services' ("DFS") Office of General Counsel has issued legal opinions that provide that New York's existing law would not permit the issuance of a service contract that would protect against the lease-end charges as described above. While New York's existing law allows service contract to cover wear and tear, such as a worn carpet, DFS has not interpreted this statutory authority to permit coverage of similar damage resulting from accidental or fortu- itous events, such as a carpet stain from a spill or an upholstery tear. Given the damage that leads to lease-end charges tends to result from some combination of wear and tear and accidental damage, it is not possible to provide meaningful protection against lease-end charges under current law and interpretation.
This bill would allow consumers to avoid unanticipated lease-end expenses by purchasing a service contract including meaningful protections from a New York registered service contract provider that meets New York's regulatory requirements (including net worth or finan- cial requirements designed to ensure that all service contract providers have the financial wherewithal to meet service contract obligations). As such, the bill would protect consumers while encouraging greater access to leased vehicles.
Legislative history
S5847 of 2017-18
Fiscal implications
None.
Effective date
Immediately.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.