American Honda Finance Corp. to Suspend All Leasing in New York July 31, 2003

TORRANCE, Calif., July 1 -- American Honda Finance Corporation (AHFC), a wholly owned subsidiary of American Honda Motor Co., Inc., today announced that AHFC and its affiliates will suspend leasing to residents of the state of New York effective July 31. On May 19, 2003th, AHFC stated it would suspend leasing activities in three states if the states did not act to repeal archaic vicarious liability laws.

"It appears that New York will not change its vicarious liability laws by the end of this month, thereby forcing AHFC to stop writing new leases in that state," said Steve Smith, senior vice president of American Honda Finance Corp. "Unfortunately, we will be forced to do the same thing in Rhode Island if it too has not changed its vicarious liability laws when their legislative session ends this week. We hoped that these states would have made progress similar to Connecticut where a bill, passed unanimously by the legislature, needs only to be signed by the governor to become law."

Honda and other leasing companies have been working in New York, Rhode Island and Connecticut to abolish archaic vicarious liability laws that allow financial institutions to be held liable in cases against lessees. On the books since the 1920s, vicarious liability laws have long outlived their original purpose and expose leasing companies to unlimited damages when the driver of the leased vehicle is negligent in an auto accident.

"Unfortunately, consumers will be the biggest losers when they are severely limited in their available finance options," said Smith. "We regret any inconvenience this may cause our customers."

In order to offer customers a viable alternative to leasing, AHFC will offer New York residents its Leadership Purchase Plan, which includes a $1500 damage waiver on excess wear and use, and a vehicle disposition fee waiver. The plan has many of the same benefits of a lease, but because the consumer is listed on the title as the owner, vicarious liability issues are eliminated.