Vehicle suppliers must pay dealers for covered repairs and recalls

Manufacturers, distributors, and factory branches must pay dealers for covered repair work at dealer retail rates. Covered work includes warranty repairs, diagnosis, certified used-vehicle warranty work, and recalls. Labor payments include time spent getting the manufacturer’s technical help. Technicians must follow the supplier’s repair procedures. Dealers must submit time records and relevant repair records, and confirm their accuracy to the best of their knowledge. Suppliers may challenge claimed rates through the law’s review process. The law took effect October 1, 2026. Payments use the dealer’s retail rate when the work is performed.

Vehicle suppliers must follow payment deadlines and allow dealers to correct certain claim errors. Decision and payment deadlines cover warranty, recall, and dealer incentive claims. Dealers get at least 90 days to submit claims for required warranty service. Claims must follow the supplier’s submission rules. Suppliers cannot recover payments solely for corrected minor paperwork errors that leave the claim valid; proven fraud remains grounds for recovery. Warranty and recall claim rejections require detailed written reasons within 45 days. Dealers have 45 days after receiving a rejection to submit a corrected claim. Suppliers must prove that disputed technician time was not worked or that the submission broke the rules. They may challenge corrected claims through the department. Dealers have at least 60 days after notice of a proposed warranty or recall payment recovery, or an incentive payment recovery, to correct minor claim errors.

Manufacturers, distributors, and factory branches must follow rules governing their dealings with vehicle dealers. The rules cover dealership ownership and locations, written and spoken agreements, vehicle delivery, government sales, and dealer incentive payments. A designated family successor must give timely notice, accept the dealer agreement, and meet operator standards. Suppliers may refuse succession for good cause. Affected dealers may challenge proposed locations or moves through the department, with an exception for certain dealerships continuing at the same location. Dealers bear shipping damage risk when they choose the transportation method and carrier. Otherwise, suppliers bear that risk until the dealer accepts the vehicle. These provisions took effect October 1, 2026.

Vehicle suppliers must compensate eligible dealers holding recalled used vehicles that cannot be sold or driven while repairs remain unavailable. Payments concern new-vehicle dealers holding recalled used vehicles for sale. The monthly payment clause requires authorization to sell new vehicles of the same brand. A safety or emissions recall must include an order barring sales or driving. Covered vehicles must be existing inventory, consumer trade-ins toward new vehicles, or lease returns accepted under their contracts. Total compensation need not exceed the vehicle’s average trade-in value. Dealers cannot combine this remedy with another state recall compensation remedy. A manufacturer may use a national payment program if it pays at least as much or the dealer agrees otherwise. Suppliers cannot reduce other compensation because a dealer claims these payments. Payments cover each month or part of a month while parts or a remedy remain unavailable and the order remains in effect.