Vehicle suppliers must pay dealers for covered repairs and recalls

Vehicle manufacturers, distributors, and factory branches must pay dealers retail rates for covered repair work. Covered work includes diagnosis, warranty repairs, certified used-car warranty work, and recalls issued by the supplier, a related entity, or its agent. Warranty labor payment equals the dealer’s customer-paid labor rate times actual time spent on necessary repairs following the supplier’s procedures. Dealers must provide technician time records, relevant repair records, and a statement that the submission is accurate to the best of their knowledge. Suppliers may challenge a dealer’s declared rate with evidence that it is unfair or unreasonable. Dealers may contest a proposed adjustment at a state hearing. The law takes effect October 1, 2026. Payment uses the dealer’s retail rate in effect when the work is performed.

Vehicle manufacturers, distributors, and factory branches must decide repair-payment claims within set deadlines and allow dealers to correct rejected claims. These rules cover dealers’ warranty and recall payment claims. Payment delays beyond the supplier’s reasonable control do not violate these rules. Dealers must submit claims in the supplier’s required form and manner. Suppliers cannot take back payment solely for a minor paperwork error after the dealer properly corrects the claim. They may take back payment for proven fraud. Suppliers rejecting claimed repair time must show that the technician did not work that time or that the submission failed to meet the law’s requirements. A rejection notice must give detailed reasons. Suppliers may challenge corrected claims through the Rhode Island Department of Revenue and bear the burden of supporting that challenge. Effective October 1, 2026, new-vehicle dealers get at least 90 days to submit required-service claims. Suppliers must decide within 30 days and pay within 30 days of approval. Dealers get 45 days to correct rejections and at least 60 days after written notice to fix minor errors behind proposed repayment demands.

Vehicle manufacturers, distributors, and factory branches must compensate eligible dealers for certain recalled used vehicles awaiting repairs. Eligible new-vehicle dealers hold used vehicles for sale of a brand they are authorized to sell or repair under a recall. The vehicle must face a federal safety or emissions recall and an order stopping sales or driving. Repair parts or a remedy must be unavailable within 30 days of the initial recall notice. Vehicles must be in inventory when the order is issued, arrive as a trade-in tied to a new-vehicle purchase, or return under a lease contract. Value comes from an independent guide’s average trade-in value. A national payment program may substitute if it pays at least as much, or the manufacturer and dealer otherwise agree. Suppliers cannot reduce other payments because dealers seek or receive this compensation. Dealers cannot combine it with another state recall-payment remedy. Effective October 1, 2026, compensation covers each month or part of a month while parts or a remedy remain unavailable and the order stopping sales or driving remains in effect.