DETROIT -- Ford Motor Co.'s finance arm Ford Credit said on Friday it plans to stop leasing vehicles in New York beginning in July due to an "outdated" law that holds leasing companies liable for auto accidents.
Ford Credit said it supported legislation passed by the New York Senate that would change the law. "We need to limit our exposure as it continues under the present law," A.J. Wagner, Ford Credit's Executive Vice President of North America, said in a statement.
Ford and General Motors had previously threatened to stop leasing vehicles in New York unless the laws were changed. New York, Rhode Island and Connecticut have so-called "vicarious" liability laws that hold the owner of a vehicle liable for an unlimited amount in accidents.
Ford said finance companies, banks and independent auto leasing companies face billions of dollars in potential payouts involving hundreds of open vicarious liability lawsuits.
Leasing is about twice as popular in New York than in the rest of the country, largely because of the tax breaks it offers businesses and the flexibility it gives drivers to have a new vehicle every few years.