GMAC May End Leases In Three States Due to Vicarious Liability
General Motors Acceptance Corp. (GMAC) notified dealers on Jan. 15 that it will quit buying leases in New York, Connecticut and Rhode Island later this year unless those states change their “vicarious liability” laws, which is not likely to happen, according to industry analysts.
As an interim step, GMAC hiked its acquisition fee on leases by $405 in those states, effective March 1. The cost is passed to consumers.
Vicarious liability means that an accident victim can sue the owner of a vehicle for damages, no matter who was driving. In a lease, the leasing company is liable, because its name is on the title.
GMAC and its biggest competitor, Ford Motor Credit Co., are offering balloon notes as an alternative to leases. A balloon note is similar to a lease, except the customer’s name goes on the title.
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