[§437-59] Used vehicle recall; stop-sale orders.

696 words·~3 min read·/hi/chapter-437/437-59

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

(a)A manufacturer shall compensate its new motor vehicle dealers for all labor and parts required by the manufacturer to perform recall repairs. Compensation for recall repairs shall be reasonable as described in subsection (e). If parts or a remedy are not reasonably available to perform a recall service or repair on a used vehicle held for sale by a dealer authorized to sell and service new vehicles of the same line make within thirty days of the manufacturer issuing the initial notice of recall, and the manufacturer has issued a stop-sale order on the vehicle, the manufacturer shall compensate the dealer at a prorated rate of at least one per cent of the value of the vehicle per month , beginning on the date that is thirty days after the date on which the stop-sale order was provided to the dealer until:

(1)The date the recall or remedy parts are made available; or

(2)The date the dealer sells, trades, or otherwise disposes of the affected used motor vehicle;

whichever is earlier.

(b)The value of a used vehicle shall 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.

(c)This section shall only apply to:

(1)Used vehicles subject to a stop-sale order for which repair parts or a remedy remain unavailable for thirty days or longer and that:

(A)Are in the dealer's inventory at the time the stop-sale order was issued; or

(B)Are taken into the used vehicle inventory of the dealer as a result of a consumer trade-in incident to the purchase of a new or certified pre-owned used vehicle from the dealer after the stop-sale order was issued; and

(2)New motor vehicle dealers holding an affected used vehicle for sale that is a line make that the dealer is franchised to sell or on which the dealer is authorized to perform recall repairs.

(d)Subject to the audit provisions of section 437-57, it shall be a violation of this section for a manufacturer to reduce the amount of compensation otherwise owed to an individual new motor vehicle dealer, whether through a chargeback, removal of the individual dealer from an incentive program, or reduction in amount owed under an incentive program solely because the new motor vehicle dealer has submitted a claim for reimbursement under this section; provided that this subsection shall not apply to an action by a manufacturer that is applied uniformly among all dealers of the same line make in the State.

(e)All reimbursement claims made by new motor vehicle dealers pursuant to this section for recall repairs, or for compensation where no part or repair is reasonably available and the vehicle is subject to a stop-sale order shall be subject to the same limitations and requirements as a warranty reimbursement claim made under section 437-56 or 437‑28(a)(21)(G). In the alternative, a manufacturer may compensate its franchised dealers under a national recall compensation program; provided that the compensation under the program is equal to or greater than that provided under subsection

(a)or the manufacturer and dealer otherwise agree.

(f)Nothing in this section shall require a manufacturer to provide total compensation to a dealer that would exceed the total average trade-in value of the affected used motor vehicle, as originally determined under subsection (b).

(g)Any remedy provided to a dealer under this section is exclusive and may not be combined with any other state or federal recall compensation remedy.

(h)A manufacturer may direct the manner and method in which a dealer shall demonstrate the inventory status of an affected used motor vehicle to determine eligibility under this section; provided that the manner and method may not be unduly burdensome and may not require information that is unduly burdensome for a dealer to provide.

(i)For purposes of this section, a "stop-sale order" means a notification issued by a manufacturer to its franchised new motor vehicle dealers, stating that certain used vehicles in inventory should not be sold or leased, at either retail or wholesale. [L 2018, c 163, §2]