Senator Storey introduces LV 667 to reform Nebraska's motor vehicle warranty compensation laws

In a pivotal session on April 9, 2025, the Nebraska Legislature spotlighted a significant bill aimed at reforming the state's motor vehicle industry regulations. Senator Storey introduced LB 667, which seeks to amend provisions related to dealer compensation for warranty repairs, a move that could reshape the dealer-manufacturer dynamic in Nebraska.

The bill addresses longstanding issues surrounding warranty compensation, particularly how manufacturers reimburse dealers for repair work. Currently, manufacturers set vehicle warranties, but disputes have arisen over the rates dealers can charge for repairs. Historically, Nebraska law mandated that these rates align with what manufacturers charge retail customers. However, as Senator Storey pointed out, manufacturers have increasingly manipulated these reimbursements, shifting costs onto dealers and, ultimately, consumers.

Key changes proposed in LB 667 include the removal of the term "reasonable" from rate standards, which has been misinterpreted by manufacturers to mean "average," thereby reducing dealer compensation. The bill aims to ensure that rates are based on actual repair orders rather than manipulated averages. Additionally, it introduces a process for dealers to appeal time allowances for warranty repairs, reflecting practices already successful in states like California.

The legislation also clarifies which repairs and parts are included in rate calculations, excluding non-warranty services and ordinary maintenance parts. Notably, tires will be removed from these calculations due to their low markup in a competitive market. Furthermore, the bill seeks to prevent manufacturers from employing cost-saving tactics on defective parts, ensuring fair compensation for dealers.

As the bill progresses, it aligns Nebraska with a growing trend among states to eliminate the term "reasonable" from warranty work legislation, with nine states already having made similar changes. The collaborative effort between new car dealers and major automotive manufacturers, including industry giants like Ford and Toyota, underscores the importance of this legislation in fostering a fairer marketplace for vehicle sales and service in Nebraska.