Rhode Island dealers press for higher warranty labor times; manufacturers warn of higher consumer costs

Dealership owners, service managers and technicians told the House Committee on Corporations on March 25 that manufacturer “warranty” labor time allowances are frequently lower than the actual time needed to complete repairs, and that mismatch is driving technicians away from dealer shops and making warranty work unprofitable.

Ted Cressy of the Rhode Island Dealers Association and a series of local service directors described examples where a dealer’s actual shop time exceeded the manufacturer time allowance by a wide margin. "To keep these technicians and to keep them trained, we have to compensate them," Elmwood Auto Group service director Jim Vidoya told the committee. Technicians and repair‑shop witnesses urged the committee to require that insurers and manufacturers reimburse based on “industry standard” guides such as Mitchell or All‑Data — or at least allow dealers to rely on third‑party time guides when manufacturer time guides are inadequate.

Automakers and industry groups testified in opposition. Eric Kirkhorn of Toyota, Matthew Irwin of Mazda, and a General Motors representative described the manufacturer process for creating time guides: measured studies using manufacturer tools and test setups, with allowances for interruptions. They warned the bill (HB5590) that would require or prioritize third‑party time guides for warranty reimbursement would increase warranty costs that ultimately flow back to consumers via higher vehicle prices. The Alliance for Automotive Innovation argued the proposed change would provide a windfall to dealers for warranty work and could raise consumer prices; the Alliance also said warranty repair margins and dealer compensation policies already enable dispute resolution and extra‑time adjustments in most cases.

Committee members heard technical detail about how time allowances are measured, examples of corroded fasteners that take longer to remove than a clean test vehicle, and evidence from local dealers that warranty work comprises a large share of shop load and that many technicians prefer nonwarranty work. No committee vote occurred on HB5590 at the March 25 hearing.

Separately, representatives from dealers and the Rhode Island Dealers Association supported House Bill 5588, which would extend franchise protections and restrict attempts by manufacturers or “new market entrants” to bypass the state dealer model. Manufacturers opposed broad statutory changes that they said could disrupt existing franchise agreements and competitiveness. The committee took testimony and did not vote that night.