Alabama Senate Bill SB52

Alabama 2022 Regular Session

• Introduced: 1/11/22
• Refer: 1/11/22
• Engrossed: 2/1/22
• Refer: 2/2/22
• Enrolled: 3/1/22
• Chaptered: 3/1/22
• Passed: 3/1/22

Caption

Motor vehicle dealers, warranty service by dealers paid by manufacturers, reasonable compensation to be paid, determination procedures, Sec. 8-20-7 am'd.

Impact

The implementation of SB52 is expected to reinforce the financial viability of motor vehicle dealerships by ensuring they receive fair compensation for their services. It introduces a process for dealerships to negotiate and potentially dispute compensation rates with manufacturers, which could lead to reduced tensions between dealers and manufacturers. Additionally, it promotes a more standardized approach in calculating costs, which can help prevent disputes and legal actions concerning warranty service payments.

Summary

SB52 addresses the relationship between motor vehicle dealers and manufacturers regarding warranty obligations and compensation for pre-delivery and warranty services. It aims to amend Section 8-20-7 of the Code of Alabama to clearly outline how reasonable compensation is determined for services performed by dealers under warranty agreements. The bill provides a structured approach for dealerships to establish their labor rates and parts markup, ensuring that compensation is aligned with what is being charged for non-warranty services.

Sentiment

The sentiment around SB52 appears to lean positive, particularly among motor vehicle dealers who feel it will empower them in negotiations with manufacturers. Supporters of the bill argue that it is a necessary measure to ensure fair compensation, particularly in light of rising operational costs in the automotive industry. However, some apprehension exists amongst manufacturers who may face increased operational costs as a result of the changes, thus creating a division between the interests of dealers and manufacturers.

Contention

Notable points of contention include the methods used to assess reasonable compensation and how these standards may vary from one dealer to another, dependent upon local labor market conditions. The bill allows dealers to file civil actions against manufacturers if compensation is disputed, which could lead to increased litigation and ongoing disputes in the automotive sector. Critics may argue this could lead to unintended consequences, complicating dealer-manufacturer relationships further.