New York State Franchise Law for New Car Dealers

HIGHLIGHTS

Restrictions on Applications of Foreign Laws – 463(2)(t)

page 36

• Applies the Franchised Motor Vehicle Dealer Act to disputes between New York dealers and their franchisors.

page 38

NEW

Export Chargebacks – 463(2)(z)

• Prohibits a franchisor from charging-back sales, incentives, or related payments due to a vehicle that is exported if the dealer can demonstrate it exercised due diligence and the sale was made in good faith and without knowledge of the purchaser’s intent to export the vehicle, or the dealer reasonably relied upon the franchisor’s approval to complete the sale. Registration of the vehicle (in any state in the U.S.) and collection of applicable sales tax will satisfy the due diligence requirement. • Requires franchisors to provide notice to dealers prior to assessing an export chargeback. • Requires franchisors to provide notice (by certified mail) to existing dealers of a proposed new point or relocation in a dealer’s RMA. • Provides an existing dealer who receives such a notice with the right to challenge the addition or relocation of the proposed new dealership. Excludes relocation or replacement of a dealer within its own existing RMA. • Places the burden on the franchisor to show good cause for a new point or relocation of an existing point within an existing dealer’s RMA. • Establishes criteria to be considered in determining whether there is “good cause” for the addition or relocation of a dealership into an existing dealer’s RMA. The criteria include consideration of the interests of the existing dealer, the franchisor and the public. page 40 Right to Protest Add Point/Relocation – 463(2)(cc)

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