DaimlerChrysler Services Takes Decisive Step Due to Vicarious Liability Legislation
DaimlerChrysler Services has announced that bothof its captive finance business units, Chrysler Financial and Mercedes-Benz Credit will raise the current acquisition fees for all new leased vehicles to $1,000 in New York, Connecticut, Rhode Island and Kentucky beginning May1, 2003. These states currently have unlimited vicarious liability laws that hold the “owner” of a motor vehicle responsible for personal injury and property damage caused by the driver of a leased vehicle, regardless of any fault or responsibility of the leasing company. With leasing, the company says finance company holds the title to the vehicle and therefore hassignificant exposure under the existing vicarious liability statutes.The company says the fee will be applied to all lease customers with garage locations in oneof these four states. This method of assessing the higher acquisition fees ensures that the customers who operate their vehicle primarily in the vicarious liability states incur the related costs of the increased risk.The acquisition fee for Chrysler Financial will increase by $450 andMercedes-Benz Credit will increase its fee by $405.“DaimlerChrysler Services strongly supports the efforts to changelegislation and is encouraged by the recent developments in the New YorkSenate and Connecticut Legislature. While raising our acquisition fee is anecessary step to combat the rising insurance premiums, it in no wayreflects a long-term viable business solution. In order to continue with anattractive and consumer focused leasing strategy, state legislation inthese four states will need to change,” stated Jürgen Walker, president andCEO of DaimlerChrysler Services North America.About DaimlerChrysler Services North America LLC
DaimlerChrysler Services North America LLC provides brand specificfinancing for automotive dealers’ inventories and their retail consumersand does business as Chrysler Financial and Mercedes-Benz Credit. Thecompany serves as the headquarters for the operations in the United States,Canada and Mexico and has over 5,000 employees who manage a portfolio of$82 billion with nearly five million contracts. DaimlerChrysler ServicesNorth America is a member of the DaimlerChrysler Services Group,headquartered in Berlin, Germany which operates in 39 countries with anemployee base exceeding 10,000 and a global portfolio of EUR 109 billion.