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State proposal could increase car ownership costs in NY

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  • Staff Report 

In New York State, where a car is often essential for jobs, education, and healthcare, car ownership costs are skyrocketing. Recent data shows car insurance premiums have risen 26% in the last year, with other expenses like repairs and tolls further driving up costs. Now, pending legislation could make things worse by increasing the prices of cars, benefitting auto dealers at the expense of consumers.

The legislation proposes a 50% increase in the reimbursement rate for warranty repairs, channeling an extra $274 million a year to auto dealers. This will raise costs for automakers and, in turn, make cars less affordable for buyers. Currently, dealers keep a large portion of warranty repair reimbursements as profit, with only a small fraction paying the technicians.

Critics argue that while the bill is presented as support for small businesses, it actually enriches wealthy dealership owners and harms consumers by driving up vehicle prices. With all 50 states having similar laws, the issue is nationwide. Experts urge lawmakers to consider the negative impact on vehicle affordability and the auto market, calling for a focus on consumer interests and market competitiveness.