RÉSUMÉ DIGEST
ACT 142 (SB 126) 2018 Regular Session Martiny
Prior law provided for additional licensing and compliance requirements for motor vehicle
and recreational product dealers. Required that an applicant furnish satisfactory evidence that
it maintains adequate space in the building or structure wherein the applicant's established
business is conducted for the display of new motor vehicles or recreational products,
together with adequate facilities for the repair and servicing of motor vehicles or recreational
products and the storage of new parts and accessories for the repair and servicing.
New law requires that notwithstanding current law and subject to the written approval by the
franchisor, adequate facilities for the repair and servicing of motor vehicles may be
physically located in a building directly across a dedicated municipal street, but not more
than 1,000 feet from the applicant's established place of business.
New law, relative to recall repairs, defines the following terms:
(1)"Stop sale order" means a notification issued by a manufacturer, distributor, factory
branch, or distributor branch to its franchised new motor vehicle dealers stating that
certain used vehicles in inventory shall not be sold or leased, at either retail or
wholesale, due to a federal safety recall for a defect or a noncompliance, or a federal
emissions recall.
(2)"Do not drive order" means a notification issued by a manufacturer, distributor,
factory branch, or distributor branch stating that certain used vehicles shall not be
driven due to a federal safety recall for a defect or a noncompliance, or a federal
emissions recall. This notification shall include an unconditional instruction to the
recipient not to drive the vehicle until the remedy for the recall is complete.
New law requires a manufacturer to compensate its new motor vehicle dealers for all labor
and parts required by the manufacturer to perform recall repairs and that the compensation
for recall repairs be reasonable.
Provides that if parts or a remedy are not reasonably available to perform a recall service or
repair on an affected used vehicle held for sale by a dealer authorized to sell and service new
vehicles of the same line-make or authorized to perform recall work on an affected vehicle
within 45 days of the manufacturer issuing the initial notice of recall, and the manufacturer
has issued a stop sale order or do not drive order on the vehicle, then requires that the
manufacturer compensate the dealer at a prorated rate of at least 1.25% per month of the
value of the vehicle
Provides that when a stop sale order or do not drive order has been issued and repair parts
or remedy remain unavailable on an affected used vehicle, then requires that compensation
begin 45 days after either of the following occurrences:
(1)The date on which the stop sale order or do not drive order was provided to the
dealer, if the affected used vehicle is in the dealer's inventory at the time the stop sale
or do not drive order was issued to the dealer.
(2)The date on which the dealer takes the affected used vehicle into the dealer's
inventory as a trade-in incident to the customer's purchase of a new vehicle.
Requires that compensation ceases when one of the following events occurs:
(1)The date the recall remedy or parts are made available.
(2)The date the stop sale order or do not drive order is withdrawn.
(3)The date the dealer disposes of the affected used vehicle.
Requires that for purposes of new law, the value of a used vehicle is be the average trade-in
value for used vehicles as indicated in an independent third-party guide for the year, make,
and model of the recalled vehicle. New law provides that for purposes of auditing dealer records for warranty and
compensation, it is a violation of new law for a manufacturer to reduce the amount of
compensation otherwise owed to an individual new motor vehicle dealer solely because the
new motor vehicle dealer has submitted a claim for reimbursement under new law. Requires
that this prohibition includes reduction through a chargeback, surcharge, removal of the
individual dealer from an incentive program, or reduction in amount owed under an
incentive program.
New law does not apply to an action by a manufacturer to any prospective change,
modification, cancellation, or elimination of any incentive program that is applied uniformly
among all dealers of the same line-make in the state.
Requires that all reimbursement claims made by new motor vehicle dealers for recall
remedies or repairs, or for compensation where no part or repair is reasonably available and
the vehicle is subject to a stop sale order or do not drive order are subject to the same
limitations and requirements as a warranty reimbursement claim made under current law.
However, a manufacturer may compensate its franchised dealers under a national recall
compensation program provided the compensation under the program is equal to or greater
than the compensation provided in new law as otherwise agreed between the manufacturer
and dealer.
New law authorizes a manufacturer to direct the manner and method in which a dealer shall
demonstrate the inventory status of an affected used motor vehicle to determine eligibility
under new law, provided the manner and method may not be unduly burdensome and may
not require information that is unduly burdensome to provide.
New law shall not require a manufacturer to provide total compensation to a dealer that
would exceed the total average trade-in value of an affected used motor vehicle as originally
determined under new law.
Provides that remedies to a dealer under new law are is exclusive and shall not be combined
with any other state or federal recall compensation remedy or other federal law.
Effective August 1, 2018.
(Amends R.S. 32:1254(E)(5); adds R.S. 32:1264.2)