On September 4, New York Gov. Kathy Hochul signed a new bill into law requiring automakers to cover all costs associated with warranty repair, plugging a major loophole causing headaches for dealers and consumers.
Bill A4066B changes how manufacturers reimburse dealers in the state for warranty and recall work.
Previously, retailers were reimbursed for warranty repairs according to fixed time allowances set by automakers. As a result, service teams who took longer than the allotted time often didn’t get paid by the manufacturer for their work. Now, automakers are required to reimburse dealers based on retail labor time guides for non-warranty work. This change means service teams are more likely to be compensated for the actual time spent on repairs.
The bill, which is already in effect, includes additional noteworthy provisions regarding dealer reimbursements:
– Manufacturers are now required to cover the costs of warranty or recall-related diagnostics.
– Additionally, automakers can no longer reject under-warranty claims due to a lack of replacement parts.
– This legislation could also contribute to an increase in technician employment at franchised dealerships, addressing the persistent shortage of skilled labor.
Warranty and recall work is a contentious topic in the car industry, with state laws frequently being leveraged to the detriment of consumers. With dealers and technicians winning in New York, it will be intriguing to see if other regions adopt similar measures.
Warranty Reimbursement Done Better