Legislature proposes bill ensuring fair warranty compensation for auto dealers

In a recent session of the North Dakota State Legislature, lawmakers convened to discuss House Bill 1515, which addresses compensation issues between auto dealers and manufacturers regarding warranty work. The bill aims to ensure that auto dealers receive fair compensation for the time and parts used in warranty repairs, a concern that has been raised by representatives of the auto dealer association.

The current law mandates that motor vehicle manufacturers provide reasonable compensation for diagnostic work and warranty repairs. However, dealers have reported that manufacturers often reimburse them at rates lower than what they charge for non-warranty services. This discrepancy has led to financial strain on dealerships, as they struggle to cover the costs of repairs while adhering to manufacturer guidelines.

During the session, a key point of contention was the use of third-party time guides by dealers to estimate repair times. These guides are typically used for non-warranty customers, but manufacturers have been known to set lower time allowances for warranty work, which does not reflect the actual time required for repairs. This has resulted in dealers feeling that they are not adequately compensated for their labor.

The proposed bill seeks to align the time allowances for warranty work with those established in the third-party guides, ensuring that dealers are compensated fairly for the time spent on repairs. Additionally, the bill addresses concerns about the pricing of parts used in warranty work, aiming to prevent manufacturers from imposing restrictions that limit dealers' ability to earn a profit on necessary repairs.

Representative Biggotha, a former auto dealer, voiced strong support for the bill, sharing personal experiences that highlight the challenges dealers face when manufacturers set unrealistic time limits for repairs. He emphasized the importance of the bill in protecting the interests of auto dealers and ensuring they can operate sustainably.

As the legislature moves forward with discussions on House Bill 1515, the outcome could have significant implications for the auto industry in North Dakota. If passed, the bill would reinforce the intent of existing laws to provide fair compensation for warranty work, ultimately benefiting both dealers and consumers by ensuring that repairs are completed effectively and efficiently. The assembly is expected to vote on the bill in the coming days, with many anticipating a positive outcome that aligns with the needs of local auto dealers.