BILL NUMBER: S8360
SPONSOR: COONEY
 
TITLE OF BILL:
An act to amend the vehicle and traffic law, in relation to procedures
relating to warranties and sales incentives
 
PURPOSE:
The purpose of this bill is to reinforce and clarifies the obligations
of vehicle manufacturers to provide fair and timely reimbursement to
their franchised dealers for warranty repairs, reduce administrative
burdens on dealers, and prevent manufacturer non-compliance.
 
SUMMARY OF PROVISIONS:
Section 1: Amends subdivision one of section 465 of the Vehicle and
Traffic Law, specifically the Franchised Motor Vehicle Dealer Act,
concerning the reimbursement of warranty parts and labor by motor vehi-
cle manufacturers (franchisors) to their franchised dealers. It mandates
that franchisors fully compensate dealers for all types of repairs,
including those for vehicle and component part warranties, service
contracts, campaigns, service bulletins, and policy repairs, at reason-
able rates. Reasonable labor compensation would be based on standard
retail time guides or a 1.5x multiplier of the manufacturer's time
allowance. The bill also introduces protections for dealers in rate-set-
ting disputes and requires manufacturers to cover parts costs using a
fair valuation method.
Section 2: Establishes an effective date.
 
JUSTIFICATION:
An update to the warranty time reimbursement provision is urgently need-
ed to address growing concerns of non-compliance by certain vehicle
manufacturers who are circumventing both the letter and spirit of the
2024 amendments (Chapter 301). Despite those reforms, dealers of certain
brands continue to report underpayment and unjustified rejections of
reimbursement claims, often due to overly complex or restrictive proc-
esses imposed by franchisors. Some manufacturers have failed to adopt
reasonable labor time standards or have introduced excessive documenta-
tion requirements that delay or deny rightful compensation.
The updated bill will close enforcement gaps and deter manipulation by
clarifying the calculation of reasonable labor time, whether by using
established time guides, multipliers of manufacturer allowances, or
documented actual time. It will also ensure that franchisors cannot
shift the financial burden of warranty repairs onto local businesses.
This correction is essential for maintaining trust in the franchise
system, ensuring operational sustainability for dealers, and upholding
fair treatment across the industry.
 
LEGISLATIVE HISTORY:
New Bill.
 
FISCAL IMPLICATIONS:
None.
 
EFFECTIVE DATE:
This act shall take effect immediately.

Statutes affected:
S8360: 465 vehicle and traffic law, 465(1) vehicle and traffic law