§ 343. Assessment of excess wear and damage to the vehicle. 1. (a)
Upon the scheduled termination of a retail lease agreement, the holder
shall not charge, receive or collect a charge for excess wear and damage
to the vehicle which exceeds: (i) the actual cost of repairs, reduced by
all discounts, paid by the holder; or (ii) a true itemized estimate of
the cost of such repairs by an appraiser licensed pursuant to section
three hundred ninety-eight-d of the vehicle and traffic law selected by
the holder, of the cost of such repairs.

(b) Upon early termination of a retail lease agreement, the holder
shall not charge, receive or collect a charge for excess wear and damage
to the vehicle which exceeds the actual costs of repairs, reduced by all
discounts, paid by the holder.

2. In order for a holder to impose a charge for excess wear and damage
to a vehicle subject to a retail lease agreement, such agreement shall
contain a clause describing the excess wear and damage to the vehicle
for which the lessee may be liable. Such holder shall, not more than
forty days nor less than twenty days prior to the scheduled termination
date, or, not more than ten business days after the date of an early
termination of a lease agreement, mail or deliver to the lessee a notice
advising the lessee of the following rights and obligations of the
parties, herein granted and imposed:

(a) Such notice shall include the following statement, as set forth
herein, at the beginning of the notice in at least ten-point bold type:

"YOUR LEASE AGREEMENT ALLOWS (HOLDER) TO ASSESS A

CHARGE FOR EXCESS WEAR AND DAMAGE TO THE VEHICLE.

YOU SHOULD OBTAIN YOUR OWN EVIDENCE OF THE CURRENT

CONDITION OF THE VEHICLE NOT MORE THAN TWENTY (20)

DAYS PRIOR TO THE SCHEDULED TERMINATION OF YOUR

LEASE. YOU ALSO WILL HAVE THE RIGHT TO SUBMIT

DISPUTES TO THE ALTERNATE ARBITRATION MECHANISM

ESTABLISHED UNDER REGULATIONS PROMULGATED BY THE NEW

YORK STATE ATTORNEY GENERAL."

(b) In the case of a scheduled termination, of the lessee's right to
turn the vehicle in with a copy of an itemized appraisal of excess wear
and damage to the vehicle prepared by an appraiser licensed under
section three hundred ninety-eight-d of the vehicle and traffic law,
selected by the lessee and conducted not more than twenty days prior to
the scheduled termination date;

(c) Of the right of the holder to, within thirty days after the date
on which the vehicle comes into the actual physical possession of the
holder, obtain a written itemized appraisal of excessive wear and damage
to the vehicle prepared by an appraiser licensed under section three
hundred ninety-eight-d of the vehicle and traffic law selected by the
holder;

(d) That if the lessee had not previously obtained and submitted to
the holder a written itemized appraisal on the lessee's own behalf in
accordance with paragraph (b) of this subdivision, the lessee will have
the greater of ten business days after the lessee has received or
fourteen business days to do so after the holder has sent, in
conformance with subdivision three of this section, an itemized bill for
excess wear and damage and a copy of the itemized appraisal prepared on
behalf of the holder, unless the lessee does not dispute any of the
items contained therein. In the case where the holder bases the charge
for excess wear and damage on the actual cost of repairs, the notice
shall also inform the lessee that should the lessee fail to obtain an
itemized written appraisal, he or she is entitled to dispute only
whether any items claimed exist and/or are excess wear and damage to the
vehicle, but not the actual cost of making the repairs;

(e) That if the lessee disputes that any of the items claimed for
excess wear and damage to the vehicle exist or are excessive in nature,
the lessee may submit the dispute within sixty days of the date on which
the vehicle comes into the actual physical possession of the holder to
the holder's informal dispute settlement procedure, if any, or, upon the
payment of the prescribed filing fee which is refundable if the
arbitrator finds in the lessee's favor, to an alternative arbitration
mechanism established under regulations promulgated by the attorney
general of the state of New York;

(f) That if there exists a discrepancy between the itemized appraisals
obtained by the holder and the lessee, if any, the holder shall submit
the dispute within sixty days of the date on which the vehicle comes
into the actual physical possession of the holder to the holder's
informal dispute settlement procedure, if any, unless the lessee
exercises the option granted by paragraph (b) of subdivision five of
this section; provided, however, that in the event the holder has
complied with the provisions of this subdivision, a lessee who has
failed to obtain an itemized appraisal of the excessive wear and damage
to the vehicle in accordance with either paragraph (b) or (c) of this
subdivision may dispute only the existence of any item or whether the
wear is excessive in nature, but may not dispute the actual cost of
repairs.

3. (a) Itemized bill. (i) In the event that the holder wishes to
impose a charge for excess wear and damage to the vehicle, the holder
shall send by registered mail or hand-deliver to the lessee a bill
containing an itemized list of the estimated or actual cost of repairing
or replacing each item as to which an excess wear and damage charge is
claimed and specifying the address to which any response must be mailed.
The bill shall be mailed or hand-delivered to the lessee within thirty
days after the date on which the vehicle comes into the actual
possession of the holder.

(ii) The itemized bill shall include the following statements printed
in at least ten-point type: "You are being asked to pay an amount
claimed for excess wear and damage to the vehicle. If you wish to
contest this amount, you must obtain an itemized appraisal from an
appraiser licensed by the New York State Department of Motor Vehicles,
and mail or deliver a copy of such appraisal to (NAME AND ADDRESS OF
HOLDER) within the greater of fourteen business days after (NAME OF
HOLDER) has sent, or ten business days of receipt of this bill and (NAME
OF HOLDER'S) itemized appraisal. If you fail to do so, you will forfeit
your right to contest in arbitration any actual repair costs incurred by
the (HOLDER) for excess wear and damage; however, you do not forfeit
your right to contest the existence of any item or whether the wear is
excessive in nature."

(iii) The itemized bill shall also notify lessees of their material
rights and obligations for dispute resolution in arbitration.

(b) Itemized appraisal. (i) A holder who imposes a charge for excess
wear and damage to the vehicle shall send by registered mail or
hand-deliver, within thirty days after the date on which the vehicle
comes into actual physical possession of the holder, a written itemized
appraisal prepared by an appraiser licensed under section three hundred
ninety-eight-d of the vehicle and traffic law. The appraisal shall be
dated, signed by the holder or its agent, and identify by type each item
of excess wear and damage.

(ii) The following notice shall be included at the beginning of the
itemized appraisal prepared on behalf of the holder and furnished to the
lessee,

"ALL ITEMS OF DAMAGE FOR WHICH A CHARGE FOR

EXCESSIVE WEAR OR DAMAGE WILL BE CLAIMED BY THE

HOLDER MUST BE NOTED IN THIS APPRAISAL. IF YOU

DISPUTE THE EXISTENCE OR NATURE OF ANY ITEM OF

DAMAGE IDENTIFIED IN THIS NOTICE, YOU MAY SUBMIT THE

DISPUTE TO THE ALTERNATE ARBITRATION MECHANISM

ESTABLISHED UNDER REGULATIONS PROMULGATED BY THE NEW

YORK STATE ATTORNEY GENERAL."

4. (a) The itemized bill and appraisal required by subdivision three
of this section may be combined into a single document. Mere
acknowledgement by the lessee of receipt of an itemized bill, an
appraisal, or a combination of the two shall not operate as an admission
of the existence, nature or amount of any of the items therein.

(b) (i) The holder shall grant the lessee access to the vehicle at a
reasonable time and place in order for the lessee to obtain an itemized
appraisal on the lessee's own behalf. The holder shall not be required,
however, to deliver the vehicle to, or produce the vehicle at, a
destination designated by the lessee for such purpose.

(ii) A holder may not fail to provide, either intentionally or by
actions or omissions, reasonable access to the vehicle by the licensed
appraiser chosen by the lessee within the period during which a lessee
must obtain and submit an appraisal. If the holder fails to so provide
reasonable access to the vehicle, the holder shall be deemed to have
forfeited its contractual right to charge, receive or collect any charge
for excessive wear and damage to the vehicle from the lessee.

(c) A lessor or holder of a retail lease agreement shall not report an
unsatisfied claim for excess wear and damage to a credit reporting
agency as a derogatory item of information until: (i) the expiration of
the time granted under article seventy-five of the civil practice law
and rules for the filing of a petition to vacate or modify an
arbitrator's award; (ii) the issue has been a subject of a final
judgment; or (iii) where the holder and the lessee execute a settlement,
thirty days after the date a payment is due under the settlement if no
payment has been made.

5. (a) Arbitration and enforcement. If a holder has established or
participates in an informal dispute settlement procedure which is
consistent in all respects with the provisions of part seven hundred
three of title sixteen of the code of federal regulations, any dispute,
disparity or conflict between any appraisal report prepared by an
appraiser licensed by the state department of motor vehicles on behalf
of the holder and one prepared on behalf of the lessee shall be decided
by such informal dispute settlement procedure. Holders utilizing
informal dispute settlement procedures pursuant to this subdivision
shall insure that the arbitrators participating in such informal dispute
settlement procedures are familiar with the provisions of this section.

(b) Upon the payment of a prescribed filing fee, a consumer shall have
the option of submitting any dispute arising under this section to an
alternate arbitration mechanism established pursuant to regulations to
be promulgated hereunder by the attorney general. Upon application of
the consumer and payment of the filing fee, the holder shall submit to
such alternate arbitration. Such alternate arbitration shall be
conducted by a professional arbitrator or arbitration firm appointed by
and under regulations established by the attorney general. Such
alternate arbitration mechanism shall ensure the personal objectivity of
its arbitrators and the right of each party to present its case, to be
in attendance during any presentation made by the other party and to
rebut or refute such presentation. In all other respects, such alternate
arbitration mechanism shall be governed by article seventy-five of the
civil practice law and rules. Holder or lessee shall have thirty days
from the date of mailing of a copy of the arbitrator's decision to such
holder or lessee to comply with the terms of such decision.

(c) In no event shall any person who has participated in an informal
dispute settlement procedure be precluded from seeking the rights or
remedies available to such person under applicable law.

(d) Nothing in this section shall be deemed to prohibit: (i) the
holder and the lessee from agreeing upon termination of the agreement to
the payment by the lessee, in satisfaction of his or her obligation
under the provisions of the agreement, of an amount which the lessor and
the lessee agree is a reasonable figure to compensate for damage to the
vehicle; (ii) the holder from retaining any portion of a security
deposit in satisfaction of amounts owed to the holder that are not
attributable to excess wear and tear; or (iii) to restrict or otherwise
regulate the assessment of charges for excess mileage.