West Virginia Franchise Law Protections COUNSELOR’S CORNER I t was great to see many of you at the West Virginia Auto Dealer’s Family Convention at Kiawah Island, South Carolina. It was, as always, a wonderful event at a beautiful location. Congratulations to the association and its team on another success. While we were enjoying the activities and business meetings, I received two common questions — let’s be honest, complaints — related to warranty reimbursement for parts and labor and allocation of motor vehicles. Since both are so important to your day-to-day operations and significantly impact your financial bottom line, I thought it timely to take the opportunity to remind everyone about the protections for these two topics within our West Virginia Franchise Law. Warranty Labor Rates and Parts Reimbursement Although the primary changes to labor and parts reimbursement were addressed with our franchise law in 2022, just a quick reminder, in the 2024 changes (effective June 5, 2024), they state that time communicating with the manufacturer is required to be reimbursed and that you can request, in writing, additional time allowance from the manufacturer’s guidelines and it will be presumed reasonable. The key takeaways here are an additional item of reimbursement and that you do not have to accept the manufacturer’s time allowance guideline. To address the specific question about how warranty reimbursement rate for parts is established, our West Virginia statutory law states that a dealer should submit one hundred sequential non-warranty customer-paid service repair orders that contain warranty-like parts or, alternatively, 90 consecutive days of non-warranty customer-paid service repair orders that contain warranty-like parts covering repairs no more than 180 days before this submission and declaring the average percentage markup. The statute further states that the retail rate for labor is to be established using the same methodology, and the dealer may use the same repair orders used to establish the parts reimbursement rate or use separate repair orders for parts and labor. Certain types of work can be excluded from the calculation. Those are repairs under a manufacturer’s special event or promotion discounts, parts sold at wholesale, routine maintenance such as bolts, batteries, fluids, filters, belts, nuts, bolts, fasteners and other similar items that do not have an individual part number, tires and vehicles reconditioning. By JOHNNIE BROWN, ESQ., Pullin, Fowler, Flanagan, Brown & Poe PLLC WVADA News 16
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