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


Section 335 Total loss notice and waiver of the gap amount

Personal Property (PEP)

1. If the retail lease agreement provides that the lessee shall be responsible upon a total loss of the vehicle occasioned by its theft, confiscation or physical damage for the gap amount, the lessor, prior to the execution of the agreement, shall by a notice on a separate document conspicuously disclose that fact and the obligations for which the lessee would remain liable in the event of a theft, confiscation or total loss of the vehicle. If the lessor is required under subdivision two of this section to offer to waive its contractual right to hold the lessee liable for the gap amount in the event of a total loss of the vehicle occasioned by its theft or physical damage, the notice shall also: (a) state that for a separate charge disclosed in the notice the lessor will waive its contractual right to hold the lessee liable for the gap amount in the event of a total loss of the vehicle occasioned by its theft or physical damage; (b) contain a provision informing the lessee that he or she may as an alternative to purchasing a waiver, be able to purchase insurance covering the gap amount from an insurance company which has been licensed by the superintendent of financial services to write motor vehicle lessee gap insurance in this state; and (c) contain a provision permitting the lessee to indicate whether he or she wants the lessor to waive its contractual right to hold the lessee liable for the gap amount in the event of a total loss of the vehicle occasioned by its theft or physical damage. The notice shall be signed by the lessee. The lessor or assignee shall provide a copy of the signed notice to the lessee, and shall maintain a copy in the lessor's or assignee's files for at least the term of the lease. Failure to provide the notice and to obtain the lessee's signature as required by this subdivision shall invalidate any provision of the agreement which otherwise would obligate a lessee to pay to the holder, after a total loss of the motor vehicle occasioned by its theft, confiscation or physical damage the gap amount. No retail lease agreement shall be conditioned upon the lessee's obtaining of motor vehicle lessee gap insurance as set forth in subparagraph (B) of paragraph twenty-six of subsection (a) of section one thousand one hundred thirteen of the insurance law.

  2. If the retail lease agreement provides that the lessee shall be responsible upon a total loss of the vehicle occasioned by its theft or physical damage for the gap amount, the lessor, prior to the execution of the agreement, shall offer to waive its contractual right to hold the lessee liable for the gap amount in the event of a total loss of the vehicle occasioned by its theft or physical damage, only if motor vehicle lessor gap insurance coverage is available to the lessor or the anticipated assignee and such coverage is obtained from a property/casualty insurance company, which has been licensed by the superintendent of financial services of this state to write motor vehicle lessor gap insurance in this state. This offer may be made contingent upon the payment by the lessee of a separate charge that shall not exceed the cost of lessor gap insurance covering the retail lease transaction plus an administrative fee not to exceed ten dollars. Nothing contained in this section shall be construed to authorize a waiver, in connection with a transaction with respect to which lessor gap insurance has not been obtained, of a contractual right to hold the lessee liable for the gap amount in the event of a total loss of the vehicle occasioned by its theft or physical damage.

  3. A lessor shall not be obligated under subdivision two of this section to offer to waive its contractual right to hold the lessee liable for the gap amount if, during the current calendar year or during the odd-numbered calendar year immediately preceding the calendar year in which the agreement is entered into, the lessor or the anticipated assignee of the lessor has received motor vehicle lessor gap insurance declination notices or other evidence of unavailability from every insurance company whose name appears on the department of financial services compilation of insurance companies which during that calendar year were authorized to write motor vehicle lessor gap insurance in this state. Evidence of these declinations shall be retained by such a lessor or the anticipated assignee of such a lessor for a period of six years after the expiration of the calendar year in which they were issued.

  4. In order to enable lessors or their anticipated assignees to comply with the requirements imposed by subdivision two of this section, the superintendent of financial services shall compile and make available a periodically updated list of those insurance companies which are authorized to write motor vehicle lessor gap insurance coverage in this state.

  5. Nothing in this section shall be construed to apply to the lessor, or any anticipated assignee of a lessor, under a retail lease agreement under which the lessee is not liable upon a total loss of the vehicle occasioned by its theft, confiscation or physical damage for the gap amount.