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NEW YORK’S ONGOING SAGA REGARDING
ISC §7902 and LWT

July 20, 2020

For three years, efforts were undertaken to change NY ISC §7902, the definitional statute regarding service contracts, to include a broader statement regarding allowable coverage for lease turn-in charges within a vehicle service contract. The predominant language that was attempted in the legislature in 2017, 2018 and 2019 was the following:

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. (NY ISC 2019 edition).

After three years, there was passage of the amended language by both the Assembly and Senate in New York and it was signed into law 6 months later. (Passed Senate 6-5-2019, Passed Assembly 6-17-2019, Governor signed 12-23-2019, https://legiscan.com/NY/bill/S03631/2019).  

By April 3, 2020, much of the lease turn-in language was undone through an almost amorphous budget bill, Assembly 09505. “Enacts into law major components of legislation necessary to implement the state public protection and general government budget for the 2020-2021 state fiscal year.” (https://legiscan.com/NY/text/A09505/2019).  Just some of the subjects in the bill: criminal justice system, closure of correctional facilities, misdemeanor crimes determinations, sales tax payments in Nassau and Erie, rape crisis assistance, elevator safety, voter education, retail licenses for beer . . . .  In short, there are many different subjects. Among those is the “Subpart Q - relates to ‘lease-end’ charges.”  

NY ISC 7902, (2020 edition) regarding lease-end charges, now reads:  

“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 interior stains, rips or scratches or missing interior parts that result in a lease-end charge not otherwise covered by a service agreement or warranty . . . .”

​So if you blinked you might have missed that the following were actually permitted for 4 months as a lease-end coverage: tires, paint cracks or chips, exterior dents or scratches, windshield cracks or chips, missing exterior parts.

​The wording at the end of Subpart Q relates the effective date of the 2020 amendment to the 2019 amendment:

“§2. This act shall take effect on the same date and in the same manner as a chapter of the laws of 2019, amending the insurance law relating 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, as proposed in legislative bills numbers S. 3631 and A. 268, takes effect.”

Mark Evans

President & CEO, AutoXcel

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