Auto Bill Threatens To Shutter New York’s Frum Car Leasing Companies

By FrumNews.com

Editors note: This deep dive into the bill is not ‘sponsored’. Over the past several years, a number of Jewish news sites and WhatsApp groups had a sponsored ad from the “Stop The Auto Broker Ban.” This FrumNews.com post aims to be an objective look and bring much needed awareness at how this bill would affect the Jewish community and its car leasing companies.

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Brooklyn, NY — A bill passed on June, 6, 2024, in the New York legislature, backed by the car dealership lobby, would regulate and potentially shut down all auto broker businesses (better known as car leasing companies) in New York State.

New York is one of about 30 states where car manufacturers are limited or banned from selling cars. Instead, they have to franchise with local car dealerships for sales.

Car leasing companies, which are deeply rooted in the Frum Kehilla, do the hard and annoying work without costing the customers anything (as most car leasing companies get paid a commission by the dealership). Car leasing companies also often find better out-of-town deals with unbeatable prices unavailable at the local dealerships.

Initially proposed in 2021, and repurposed in 2024, the bill comes as car ownership costs have soared in recent years, with auto insurance premiums going up 26% over the last year.

It would force car leasing companies to obtain three bids, at least one from a local dealership (which would hurt the auto broker’s ability to get hard-to-get deals). It also adds many regulations for auto brokers, such as raising surety bonds to $250,000, raising penalties and adding more overhead.

Some aspects of the bill are good, like adding disclosures, requiring auto brokers to clarify that it is not a dealership and forcing them to protect consumer data.

Yet this bill has its flaws. It effectively eliminates dealership competition and seems likely to raise the costs of leasing a vehicle by nearly 50% and limit options, as local Heimishe car leasing companies would be forced out of the state or shut down. It would force everyone in New York to deal directly with car dealerships (which everyone hates) that use a monopoly on their pricing and offer zero customer service.

In simple terms, in the Jewish community, we have an estimate of about 40 different licensed heimishe-owned car leasing companies in New York State (some large companies, some small, but each with many employees from their local community and neighborhood) that give better customer service at the lowest price possible, but that’s not it. From your home, you can comfortably send ‘your car leasing guy’ the vehicle you want with your information, and sometimes, in under 24 hours, that brand-new leased vehicle is delivered to your doorstep, where you sign the papers.

This bill would make you rush to one of the limited few dealerships in the entire city or state, wait two hours before you are even noticed, and see if they have the vehicle you like in stock. Then, try to arrange a price with the mafia-style dealerships, which monopolize and overprice their vehicles with hidden fees.

The NY bill added that car leasing companies deprive consumers “of potential savings because the obscure how much they are paid,” and claim they don’t “make a serious attempt to get the best deal.” Here in the Frum Kehilla we see first hand, how car leasing companies gets us the lowest prices, with dedicated work, effort and devotion by our car leasing guy. Yet car dealerships, which are regulated, regularly rip consumers off. Only recently did dealerships have to tell consumers the MSRP (Manufacturer’s Suggested Retail Price).

Simply put, each frum car leasing company is greatly appreciated in their respected Kehilla, and local residents want to shop local, deal local and Lease Local by their community car leasing company.

Those for it state the bill would decrease the incidents of deceptive practices by some auto brokers by requiring them to get a license to operate—in line with similar professions like real estate and tax accountants.

The lobby against the bill states, “This unprecedented control, combined with the interest rate hikes, has and will continue to put cars out of reach for individuals who are struggling to get back on their feet after an unprecedented and difficult few years.”

Even if this bill gets vetoed, why does it matter? The bill is one of many bills in New York State that are pushed by car dealerships, which use their community relationships with elected officials and political campaign donations to foster a better business environment for themselves.

However, as we see here, the dealerships do not have the ultimate say, and some laws do pass that put them in their zone.

Will the bill get signed into New York State Law?

This bill is a bipartisan hit-job against NY’s ‘Auto/Vehicle Brokers’ if the bill becomes law, it will put every car leasing company in the entire state of New York out of business. Many car leasing companies will relocate to New Jersey, with Lakewood being the primary location according to the frum owners of numerous local car leasing companies.

Elected officials who proudly represent NY’s Jewish Community voted against this harmful bill, which include:

Senator Bill Weber (Monsey/Rockland County)

Senator Simcha Felder (Midwood, Brooklyn)

Assembyman Sam Berger (Kew Gardens Hills, Queens)

Assemblywoman Stacey Pheffer Amato (Far Rockaway, Queens)

Assemblyman Simcha Eichenstein (Borough Park, Brooklyn)

Assemblyman Chris Eachus (Monroe/Kiryas Joel)

Assemblyman David Weprin (Queens)

Assemblyman Sam Pirozzolo (Staten Island)

In a statement to FrumNews.com Senator Bill Weber from Rockland County said “I was one of just eight senators to vote NO on this bill because of the harm it would bring to businesses in my district and across the state. I urge Governor Hochul to veto this harmful legislation.”

A group of 22 dedicated community leaders and Askunim from each Jewish community across New York State wrote a letter asking Governor Kathy Hochul to veto Senate Bill 7533/Assembly Bill 3499-B, the new law passed by the state legislature on June 6, 2024.

They are calling on New York Governor Hochul to veto the bill, arguing that this bill is anti-consumer and will harm the state’s economy.

The full list of those signed onto the letter:

Josh Mehlman – Chairman, Flatbush Jewish Community Coalition

Mendy Mirocznik – President, Council of Jewish Organizations of Staten Island

Avi Greenstein – CEO, Boro Park Jewish Community Council

Rabbi Moishe Indig – Satmar Community Leader

Rabbi David Niederman – President, United Jewish Organizations of Williamsburg and North Brooklyn

Baruch Rothman – Director of Institutional Advancement, Yeshiva Darchei Torah – Far Rockaway

Yeruchim Silber – Director of New York Government Relations, Agudath Israel of America

Rabbi Moshe Wiener – Executive Director, Jewish Community Council of Greater Coney Island

Shimi Pelman – Community District Leader

Shea Rubenstein – Executive Vice President, Jewish Community Council of Marine Park

Meir New – Director of Governmental Affairs, Crown Heights Central Jewish Community Council

Rabbi Chanina Sperlin – Community Leader, Crown Heights

Rabbi Yoel Rosenfeld – Bobov Community

Abraham Rutner – Secretary, Jewish Community Council of Sullivan County

Allison Deal – Executive Director, Jewish Community Council of the Rockaway Peninsula

Gedalya Szegedin – Administrator, Village of Kiryas Joel, Town of Palm Tree

Rabbi Avrohom Hecht – Jewish Community Council of Canarsie

Yoel Stern – United Jewish Community of Blooming Grove

Ellie Pinkasovits – Mayor of Keser Village, Rockland County.

Izzy Spitzer – Mayor of New Square (Skver), Rockland County.

Rabbi Jacob Ferencz – Monroe/Kiryas Yoel Community Council

Rabbi Hersh Horowitz – Executive Director, Community Outreach Center, Rockland County.