Dealers, technicians urge lawmakers to close warranty reimbursement loopholes in House Bill 1515; manufacturers oppose

Rep. Dan Ruby introduced House Bill 1515 on behalf of dealers and technicians seeking changes to how manufacturers reimburse dealers for warranty labor and parts. Supporters told the House Transportation Committee that current practices leave dealers, their parts departments and technicians underpaid for work manufacturers require them to perform.

The bill would require manufacturers to reimburse dealers for warranty labor and parts at the dealer’s normal retail (free-market) rates and close what supporters described as loopholes manufacturers use to reduce payment — including unilateral changes to labor times, shipping replacement parts at no cost so dealers cannot collect a parts markup, and changing part numbers (for example, during recalls) to lower reimbursed part values.

Matthew Larsgaard, appearing on behalf of the Automobile Dealers Association of North Dakota, told the committee the state’s 87 franchised new-car dealerships collectively sold about $3.3 billion in retail vehicles in 2023, employ nearly 3,900 people and have an annual payroll of roughly $275 million. Larsgaard said the 2013 law (introduced as House Bill 1192) that required manufacturers to reimburse dealers at their retail labor and parts rates helped, “but since that time manufacturers have found several loopholes… and they are not fully compensating dealers at their normal free market rate.”

Technicians and fixed-operations managers gave detailed examples. Ryan Elsey, fixed operations director for ID Automotive Group, said manufacturers often…