1. The Laws of New York
  2. Consolidated Laws
  3. Personal Property
  4. Article 9-A: Motor Vehicle Retail Leasing Act


Section 331 Definitions

Personal Property (PEP)

In this article, unless the context or subject matter otherwise requires:

  1. "Motor vehicle" or "vehicle" means any device propelled or drawn by any power other than muscular power, upon or by which any person or property is or may be transported or drawn upon a public highway, road or street. The term does not include a "snowmobile" as defined in subdivision three of section 21.05 of the parks, recreation and historic preservation law or other vehicles not designed primarily for highway transportation, but which may incidentally transport persons or property on a public highway.

  2. "Retail lessee" or "lessee" means a natural person who leases a motor vehicle from a retail lessor primarily for personal, family or household use and who executes a retail lease agreement in connection therewith. For purposes of section three hundred thirty-four and subdivisions two and three of section three hundred forty-six of this article, the term also includes a person who makes a payment to a lessor or leaves his vehicle with a lessor pending the execution of a retail lease agreement. Except as provided in sections three hundred forty-eight and three hundred forty-nine of this article, the term does not include a person who leases a motor vehicle primarily for agricultural, business or commercial use or for the purpose of subleasing.

  3. "Retail lessor" or "lessor" means a person regularly engaged in the business of leasing or selling motor vehicles who leases a motor vehicle to a retail lessee under or subject to a retail lease agreement.

  4. "Retail lease" or "lease" means a transfer from a retail lessor to a retail lessee of the right to possession and use of a motor vehicle in return for consideration. The term does not include a sale, including a sale on approval or a sale or return, a retail instalment sale as defined in article nine of this chapter or the retention or creation of a security interest in a motor vehicle.

  5. "Retail lease agreement" or "agreement" means an agreement, entered into in this state, for the lease of a motor vehicle, and which may include the purchase of goods or services incidental thereto, by a retail lessee for a scheduled term exceeding four months, whether or not the lessee has the option to purchase or otherwise become the owner of the vehicle at the expiration of the agreement. The term includes such an agreement wherever entered into if executed by the lessee in this state and if solicited in person by a person acting on his own behalf or that of the lessor. The term does not include a retail instalment contract or a rental-purchase agreement as defined in articles nine and eleven of this chapter. An agreement that substantially complies with this article does not create a security interest in a motor vehicle as the term "security interest" is defined in paragraph thirty-five of subsection (b) of section 1--201 of the uniform commercial code.

  6. "Additional early termination charge" means the initial dollar amount of the early termination charge the portion of which is recoverable by the holder upon early termination in addition to the amounts specified in paragraphs (a) through (e) of subdivision one of section three hundred forty-one of this article. The additional early termination charge may only include amounts which are reasonable in light of the anticipated or actual harm caused by the delinquency, default or early termination, the difficulties of proof of loss and the inconvenience or nonfeasibility of otherwise obtaining an adequate remedy. Any fees or charges included in the additional early termination charge may not also be included in the capitalized cost.

  * 7. "Initial early termination charge" means the sum of the adjusted initial lease value and the additional early termination charge, which would be recoverable under the lease agreement if the agreement were to be terminated before any of the periodic rental payments had become due. The term does not include any vehicle disposition fee or any other components of a lessee's early termination liability which could not have been incurred by the lessee at lease inception.

  * NB There are 2 sb 7's

  * 7. "Adjusted capitalized cost" means the capitalized cost less any capitalized cost reduction payments made by the lessee at the inception of the lease and any net trade-in allowance granted by the lessor.

  * NB There are 2 sb 7's

  8. "Anticipated assignee" means the person to whom the lessor anticipates that the agreement will be assigned and to whom the agreement subsequently is assigned by the lessor.

  9. "Base rental payment" means that portion of the monthly or other periodic rental payment which is equal to the sum of: (a) the average monthly or other periodic lease charge; and (b) the average monthly or other periodic depreciation. For purposes of this article, the average monthly or other periodic depreciation may include a monthly or other periodic charge for any item that the lessor has included in the capitalized cost.

  10. "Conspicuous" means that a term or clause is so written that a reasonable person against whom it is to operate ought to have noticed it. Whether or not a term or clause is conspicuous is a question of law for decision by the court.

  11. "Capitalized cost" means the agreed upon amount which serves as the basis for determining the base rental payment and a portion of the early termination liability of the lessee. The capitalized cost may include any taxes, registration, license acquisition, assignment and other fees and charges for insurance, for a waiver of the contractual obligation to pay the gap amount, for accessories and their installation, for delivering, servicing, repairing or improving the motor vehicle and for other services incidental to the agreement. It also may include the unpaid balance of any amount financed under an outstanding motor vehicle loan agreement or motor vehicle retail instalment contract or the unpaid portion of the early termination obligation under an outstanding motor vehicle retail lease agreement. The term does not include any lease charge or any amount included in the additional early termination charge.

  12. "Capitalized cost reduction" means any payments made by cash, check or similar means that are in the nature of downpayments made by the lessee at the inception of the lease for the purpose of reducing the capitalized cost.

  13. "Constant yield method" means: (a) in the case of a periodic payment lease, that method of determining the lease charge portion of each base rental payment pursuant to which the lease charge for each computational period is earned in advance by multiplying the constant rate implicit in the lease times the balance subject to lease charge as it declines during the lease term. At any given time during the scheduled term of a periodic payment lease, the balance subject to lease charge is the difference between the adjusted capitalized cost and the sum of: (i) all depreciation amounts accrued during the preceding computational periods; and (ii) the first base rental payment; (b) in the case of a single or advance payment lease, that method of determining the periodic earning of lease charges pursuant to which the lease charge for each computational period is earned in advance by multiplying the constant rate implicit in the lease times the balance subject to lease charge as it increases during the scheduled lease term. At any given time during the scheduled term of a single or advance payment lease, the balance subject to lease charge is determined by subtracting from the estimated residual value the total lease charge scheduled to be earned over the term of the lease and adding to the difference all lease charges accrued during the preceding computational periods; (c) in the case of either type of lease, the periodic lease charge calculations are based on the assumption that the holder will receive the rental payments on their exact due dates and that the lease goes to its full term.

  14. "Estimated residual value" means the estimated value of the leased vehicle at the scheduled end of the lease term, used by the lessor in determining the base rental payment, as established by the lessor at the time he enters into a retail lease agreement.

  15. "Gap amount" has the meaning ascribed to it in paragraph fifty-two of subsection (a) of section one hundred seven of the insurance law.

  16. "Gap insurance" has the meaning ascribed to it in paragraph twenty-six of subsection (a) of section one thousand one hundred thirteen of the insurance law. For purposes of paragraphs (a) and (b) of subdivision six of section three hundred thirty-seven of this article, gap insurance shall not be deemed "liability insurance or insurance on the vehicle".

  17. "Group credit insurance" means group credit life insurance, group credit accident insurance, group credit health insurance, group credit accident and health insurance or group credit unemployment insurance.

  18. "Holder" means the retail lessor of a motor vehicle under or subject to a retail lease agreement or, if the agreement is purchased by an assignee, the assignee. Unless and until it realizes upon its security interest therein, the term does not include a pledgee of one or more lease agreements to secure a bona fide loan thereon.

  19. "Lease charge" means the charge to be paid by the retail lessee for the privilege of making the rental payments as scheduled under a retail lease agreement. The term does not include any amount included in the capitalized cost. The term also does not include any delinquency, default, disposition, early termination, collection, or reinstatement charge and the amount, if any, included in a retail lease agreement for taxes, registration, license acquisition, assignment and other fees and charges for insurance, for accessories and their installation, for delivering, servicing, repairing or improving the motor vehicle and for other services incidental to the agreement, whether or not such amounts are included in the capitalized cost, paid for separately at lease inception by cash, check or similar means or paid for on a monthly or other periodic basis in addition to the base rental payment.

  20. "Person" means an individual, partnership, corporation, association or other group, however organized.

  21. "Precomputed lease transaction" means a retail lease transaction in which the base rental obligation is a sum comprising the total depreciation estimated to occur during the scheduled term of the lease and the amount of the lease charge computed in advance. A disclosure required by the act of Congress entitled "Consumer Leasing Act of 1976" does not in itself make a lease charge or transaction precomputed.

  22. "Realized value" means: (a) the price received by the holder for the leased vehicle at disposition; (b) the highest offer received by the holder for disposition of the leased vehicle; or (c) the fair market value of the vehicle, determined pursuant to subdivision one of section three hundred forty of this article by a mutually acceptable independent appraiser, at the scheduled end of the lease term or, if the lease is terminated prior thereto, at early termination. The realized value of the vehicle may be its value in the customary wholesale market.

  23. "Renegotiation" means the satisfaction of an existing retail lease agreement and the replacement of the existing agreement by a new lease agreement undertaken by the same lessor or holder and the same lessee. The term does not include: (a) the substitution of the leased vehicle or the addition or return of a vehicle in a multiple-vehicle lease, if in either case the average payment allocable to a rental period is not increased by more than twenty-five percent; (b) a deferral or extension of one or more periodic payments, or portions of a periodic payment; (c) a reduction in charges in the agreement; (d) an agreement involving a court proceeding; or (e) any other agreement or event which does not constitute a "renegotiation" under the act of Congress entitled "Consumer Leasing Act of 1976" and the regulations thereunder, as such act and regulations may from time to time be amended.

  24. Words in the singular include the plural and vice versa.