New York State Franchise Law for New Car Dealers

HIGHLIGHTS

Consent to Program Participation – 463(2)(hh)

page 43

• Prohibits franchisors from requiring dealers to contribute money to a program or promotion without first receiving the dealer’s written consent.

Inventory AllocationWith Geographic Area – 463(2)(ii)

page 43

NEW

• Requires franchisors to give credit to dealers, for inventory allocation purposes, for sales of new motor vehicles to persons from areas outside a franchisees assigned sales territory.

Inventory Allocation Fairness and Transparency – 463(2)(jj)-(kk)

page 43-44

NEW

• Requires franchisors to make fair vehicle allocations of vehicle inventory and to disclose, upon the request of a dealer, its vehicle allocation methodology and the actual allocations to individual dealers.

Procedures Relating toWarranty Reimbursement and Sales Incentive Claims – 465(1)-(2)

page 44-46

NEW

• Clarifies that a franchisor must reimburse dealers for the performance of warranty work at the dealer’s retail rate charged for non-warranty work. • Establishes a specific method by which a dealer is to support the calculation of its retail rate on non- warranty work (the 100 most recent customer-paid R.O.s). • Requires that a dealer’s average retail rate calculation should go into effect 30 days after it is submitted. • Allows a dealer to request a change to the average retail rate each year. • Prohibits a franchisor from instituting burdensome procedures for reimbursement. • Excludes certain products from the retail rate calculation in order to avoid distortions in rate.

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