Pub. 1 2019-2020 Issue 4

http://wvcar.com 20 WVADA By Johnnie E. Brown Pullin, Fowler, Flanagan, Brown & Poe, PLLC Motor Vehicle Dealers’ Rights I hope everyone is safe, healthy, and learning how to effec - tively conduct business in the time of COVID-19. While I had promised a Part II on Advertising, I am seeing more ef - forts by manufacturers to challenge motor vehicle dealers’ franchise law rights. It is more timely to remind you of the significant updates made to your franchise law in 2015. The following is a summary of the more significant changes that were made. Please keep the following in mind when dealing with the manufacturer. 1. Facility Upgrades. Once your dealership is found in compli - ance with a manufacturer’s facility requirements, for a period of ten (10) years thereafter, a motor vehicle dealer shall be deemed to be in compliance with any program requirement pertaining to the construction of facilities or the installation of signs or other franchised image elements. This restriction can help with a va - riety of manufacturer’s programs, including those related to any sales rebates, incentives or other monies. For example, if you were compliant five years ago, and they change a program that requires an update to your facility, you are deemed compliant for five more years without making any changes. 2. Purchase of Goods and Services. A provision now protects dealers concerning the purchase of goods or services from specific vendors. If the dealer can obtain goods or services of substantially similar quality and overall design from a vendor chosen by a dealer, then those can be used. Should the manufacturer wish the dealer to use specific goods or services, the manufacturer must pay the difference in price between the goods and services of the manufacturer’s pro - posed vendor and a motor vehicle dealer’s selected vendor. 3. Warranty Reimbursement. A specific formula was imple - mented that requires dealers to receive retail rate for both war - ranty service and parts. In order to assist the dealer, certain work or items are excluded from the calculation, including parts sold at wholesale, routine maintenance such as fuels, filters, and belts, nuts, bolts, fasteners, and other similar items, tires, and vehicle re - conditioning. By excluding these lesser items, a truer rate of retail is achieved. The dealer can seek to determine the retail rate every twelve (12)months. All claims submitted under warranty and recall work must be either approved or disapproved by a manufacturer within thirty (30) days. A manufacturer can only do an audit for the last twelve (12) months of service records. Once a claim is ap - proved and paid, it may not be charged back against the dealer un - less the manufacturer can show that the claim was either false or fraudulent or that the repairs were not properly made or were un - necessary. This puts a significant burden upon the manufacturer. 4. Open Account Protection. This was a significant change in franchise law to protect your open account with the manu - facturer. Now, if a dealer disagrees with a manufacturer over a charge, delivery or chargeback, all the dealer has to do is to tell the manufacturer of its objection and to not remove the COUNSELOR’S CORNER with Franchise Laws