Industry Backs New York Bill to Amend Liability Guidelines

ALBANY, N.Y. -- The car rental industry is solidly backing the Motor Vehicle Renter’s Responsibility and Protection Act, a New York bill that would put an end to the $100 liability limit in place for car rental customers in the state of New York. The bill, which seeks to rewrite a section of the New York General Business Law, would allow operators to recover all damages to a rental vehicle except for loss of use.

In addition to spelling out procedures for recovery of damages to rental vehicles, the Motor Vehicle Renter’s Responsibility and Protection Act also:  Permits the sale of damage waivers for $9 or $12 a day, depending on the value of the vehicle  Requires a damage waiver disclosure on the rental agreement  Spells out the grounds for voiding a damage waiver  Regulates price advertising  Requires signage that discloses damage waiver policies.

Section 396-z of the New York General Business Law has stirred controversy since its passage in 1989. By requiring car rental businesses to assume responsibility for all but $100 in collision damages, the law made rental businesses in New York vulnerable to devastating losses.

Since the law passed in 1989, the number of rental outlets in New York has dropped 63%, according to industry research.

“I consider the current law to be an immoral law,” explained Richard Aronow, cofounder of the New York Vehicle Rental Association and operator of Money’s Worth Auto Rental in Westchester County, New York. “It deprives car rental operators of private possession of their property. It’s a very demoralizing thing to be in the car rental business year after year and find people careless with your property and you don’t have any recourse.”

Many of the industry’s major car rental companies, as well as the New York Vehicle Rental Association, have lobbied actively for the new bill’s passage.

“We’re very much together on this,” said Patrick Farrell, director of corporate communications for Enterprise Rent A Car. “This is not about one company versus another. This is just about what’s appropriate and fair for the consumers of New York.”

Though the $100 liability cap for renters was originally intended to protect consumers, the policy has led to much higher rental rates, Farrell pointed out.

“Number one, a lot of small operators have closed down,” Farrell said. “And number two, those operators that remain must operate with all that regulation so the cost of renting a vehicle in the state of New York is as much as 50% higher than states like Connecticut and New Jersey.”

At press time, the bill was still in committee, but a vote in the state senate was expected soon.

“This bill is so important to us because it makes a difference of tens of thousands and hundreds of thousands of dollars a year to auto rental companies in New York,” Aronow said. “In some cases, millions of dollars.”