SB 502 - This act modifies the statute governing motor vehicle dealer compensation for warranty services. The act also repeals the applicability of the statute to preparation and delivery services. The act provides that compensation for parts used in warranty services shall be in an amount that is reasonable, as determined under the act. Franchisors may request documents from franchisees to substantiate the amount of compensation, but shall not request documentation of a type or amount that is unduly or unnecessarily burdensome.
Compensation for labor used in warranty services shall be in an amount that is reasonable, which, at the election of the dealer, shall be determined as specified in the act or as described in a labor compensation schedule prescribed by the franchisor.
Lastly, the act provides that if parts or components for certain types of repairs are provided to the franchisee at no cost, reasonable compensation for the parts shall be primarily determined by the amount charged by the franchisee to retail customers for similar nonwarranty repair parts, rather than on the parts' average cost markup.
ERIC VANDER WEERD