Missouri proposal would change how vehicle dealers get warranty pay

Franchisors would pay dealers for required warranty repairs, using reasonable parts compensation and a labor method that may use the dealer’s regular rates and repair times. These rules cover warranty parts and labor that the franchisor requires the dealer to provide. The main factor for parts pay would be what the dealer charges retail customers for similar parts in nonwarranty repairs. A franchisor may request reasonable records to support those prices, but not records that are unduly burdensome. At the dealer’s election, labor pay would use the method in subsection 3 instead of the franchisor’s labor schedule.

Franchisors would pay dealers a reasonable amount for certain free parts used in repairs. It applies when a franchisor, manufacturer, importer, or distributor provides a part or component at no cost for a recall, campaign service action, or warranty repair. The main factor would be what the dealer charges retail customers for similar parts in nonwarranty repairs. This rule would not cover entire engine assemblies, electric vehicle batteries, or entire transmission assemblies.

Franchisors would follow deadlines for deciding and paying claims and limits on audits and records requests. These procedures cover claims under this section, including warranty claims and claims for sales or incentive payments. Claims not rejected in writing within 30 days would count as approved, with payment due within 15 days afterward. Audits and charge-backs would generally be limited to 12 months after payment; good cause to suspect fraud would allow an audit for up to two years. A franchisor would have to give written notice, the audit, and detailed reasons before making an audit-based charge-back. A dealer could file a complaint within 60 days after receiving written notice of an adverse decision.

A dealer’s timely complaint would pause an adverse claim decision, rate decision, or charge-back while it is reviewed. A dealer could challenge a written adverse decision on a reimbursement claim or request to raise a labor or parts rate. If the commission finds that a franchisor violated the section, the adverse decision or charge-back would be void, and the franchisor would have 15 days to pay the dealer as required. The franchisor would have 30 days to answer the complaint, and the hearing would be held within 60 days after that answer is served.