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I recently rented a car in New York state. I signed the contract at
the location of pickup (in NYC) and returned the car to the same
location. I drove the car in New Jersey (permitted under the
agreement) and I was the only driver.
The car was damaged during the rental period (apparently a hit and run
while the car was parked in a parking lot) and suffered minor damage.
I received a bill from the rental car company including both an
estimate for repairs and for "loss of use" charges (loss of use
meaning that while they were performing the estimate/repairs they were
unable to rent it out). The bill they sent me for the damages came
from Oklahoma and the payment address is in OK as well. I am a North
Carolina resident.
I have insurance through my credit card, but they require me to pay
the car rental company directly and then they will reimburse me
afterwards. They only reimburse for the cost of physical
repair/replacement of the car - no loss of use.
Based on what I can tell, New York general law article 26, section
396-Z prohibits them from charging me for "loss of use". Subsection
6(d):
6. ...
(d) Damages incurred by rental vehicle companies for the loss of use
of a rental vehicle and related administrative fees shall not
be recovered from authorized drivers.
Section 6(b) seems to confirm this, but it is not as explicit.
Here is the URL where I found this law:
http://assembly.state.ny.us/leg/?cl=44&a=57
The rental agreement has two parts - a generic part and a
state-specific part. They're both too long to type in, but these are
the relevant sections.
The generic part states:
You are absolutely liable for any loss of or damage to the vehicle,
even if someone else caused it or the cause is unknown, whether due to
theft, fire, (blah, blah, blah) or any other cause, SUBJECT TO
LIMITATIONS IMPOSED BY THE LAW OF THE JURISDICTION WHERE THE VEHICLE
IS RENTED. Your liability will not exceed the full value of the
vehicle, actual towing and storage charges, LOSS OF USE, diminution in
value to the vehicle due to unrepaired damage before resale, a
reasonable administrative fee and pro-rata license plate fees, AS
ALLOWED BY LAW. (emphasis added)
The state-specific part says:
Under Section 396-z of New York general business law, you may be
liable for ACTUAL DAMAGE TO, OR LOSS OF, the rental vehicle, and have
certain rights and responsibilities in that regard, as set forth
therein. (emphasis added)
Note that the state-specific part makes no reference to "loss of use"
and also specifically references the law that I quoted above which
seems to prohibit them from charging me for "loss of use."
Before I make a big stink about this,
1) Is NY state law the only law that applies?
2) Is my reading of the law correct - that they are not permitted to
charge me for loss of use? Did I miss anything? The law seems to be
set to change Feb 24, 2008, but I think the section I'm quoting is
currently active.
3) If I pay only the physical repair amount and they try to sue me for
the "loss of use", would they have to file suit in NY?
4) Anything else I forgot about?
Thank you.
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