Texas House Bill HB3859

Texas 2025 - 89th Regular

• Filed: 3/5/25

Caption

Relating to motor vehicle franchised dealers and the reimbursement of motor vehicle franchised dealers by manufacturers and distributors for warranty, recall, over-the-air, and preparation and delivery work.

Impact

If established, HB 3859 will influence the existing regulatory framework governing motor vehicle dealers. It mandates manufacturers and distributors to compensate their dealers fairly, based on established formulas and without imposing additional charges that could undermine dealer profitability. By requiring manufacturers to follow these compensation guidelines strictly, it seeks to improve financial outcomes for dealers, particularly in warranty and recall work scenarios, thereby fostering a more stable economic environment for motor vehicle sales and service.

Summary

House Bill 3859 addresses the relationship between motor vehicle franchised dealers and manufacturers or distributors. It outlines specific requirements for how dealers should be compensated for warranty and recall work, including over-the-air services. The bill seeks to provide clarity in the compensation structure, ensuring that dealers receive fair remuneration for the services they provide under manufacturer warranties and recalls. This initiative seems aimed at balancing the financial interests of both dealers and manufacturers while enhancing the overall customer service experience in the automotive industry.

Contention

While the bill is primarily aimed at protecting dealers' interests, it could be met with resistance from some manufacturers who may view it as a limitation on their operational flexibility. Critics might argue that the bill could impose higher costs on manufacturers, potentially leading to increased prices for consumers or reduced incentives for dealers to offer additional services. The implementation of this bill may thus result in a reconfiguration of the dealer-manufacturer relationship, necessitating negotiations and compliance adjustments to align with the new requirements.

Texas Constitutional Statutes Affected

Occupations Code

• Chapter 2301. Sale Or Lease Of Motor Vehicles
  • Section: New Section