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Motor Vehicle Dealer And Manufacturer Service Rates

Concerning the rates a motor vehicle dealer charges a motor vehicle manufacturer for work performed by the dealer in accordance with a warranty obligation.
2018 Regular Session
Business & Economic Development
Bill Summary

Motor vehicle and powersports vehicle sales - manufacturers - dealers - warranty obligations. The act requires a manufacturer to compensate each of its motor vehicle or powersports vehicle dealers in accordance with a set of standards designed to reflect the current market rate for labor and the profit margin on parts the dealer can expect to obtain. Dealers must submit certain repair orders to the manufacturer as required by the act to establish compensation rates. Certain types of transactions are excluded from the calculation of the current market rates. The dealer may request a modification of rates from a manufacturer only once annually.

The manufacturer may contest the rates charged by the dealer if the rate is materially inaccurate or substantially different than the rates of other similarly situated same line-make dealers in the state. If the manufacturer does not contest the rates within 45 days, the amounts take effect. If the manufacturer timely contests the rates and the manufacturer and dealer cannot agree on the amount charged, the dealer may obtain a determination by a court or the executive director of the department of revenue.

A manufacturer is:

  • Prohibited from establishing unreasonable flat-rate times for labor;
  • Required to calculate the retail parts markup percentage from the dealer's wholesale cost for the part;
  • Prohibited from establishing different part numbers for warranty repairs to pay the dealer lower compensation;
  • Prohibited from attempting to recover the costs of paying the dealer from the dealer using other methods;
  • Prohibited from taking any adverse action against the dealer for asserting the dealer's rights under the act;
  • Prohibited from requiring a dealer to use any method that is unduly burdensome or time-consuming to account for the retail prices set under the act.
    (Note: This summary applies to this bill as enacted.)


Became Law


Bill Text

The effective date for bills enacted without a safety clause is August 7, 2024, if the General Assembly adjourns sine die on May 8, 2024, unless otherwise specified. Details