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

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Frum Car Leasing Companies in NYS may be shut down - A bill floating around in the New York legislature, backed by the car dealership lobby, would regulate better known as car leasing companies, which threatens to put them out of business

By FrumNews.com

Editors note: This deep dive into the bill is not sponsored. Recently, 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 Frum community and its car leasing companies.

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Brooklyn, NY — A bill floating around 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 buyers 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 reproposed in 2023, the senate bill comes as car ownership costs have soared in recent years, with auto insurance premiums going up 26% over the last year. (The bill also mirrors the now-paused due to elections congestion pricing scheme, which would cost drivers $15 to enter Manhattan.

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 owning a car 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 Frum community, we have dozens (if not more) of licensed heimishe-owned car leasing companies in New York State 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 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.

It 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 asking 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.”

Will the bill pass?

Sources in the New York Legislature told FrumNews.com that the bill is dead for this year as the Senate recently wrapped up its legislative session and will not reopen until January in the next Senate.

It would need to be reintroduced for a third time. The bill has not had much success as it failed to pass the committee both times and never had a partner in the Assembly.

If it won’t pass, why does it matter? The bill is one of many bills in many states that are pushed by car dealerships, which use their community relationships and political campaign donations to foster a better business environment in their state.

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