SB178 Alabama 2017 Session

Updated Feb 27, 2026

Low Interest

Summary

Primary Sponsor: Clay Scofield
Republican
Session: Regular Session 2017
Title: Motor vehicle dealers, new, franchise act, new and used vehicles, recalls, payment during stop-sale orders when repair parts not available, Sec. 8-20-7.1 added
Summary: SB178 requires manufacturers to compensate dealers for recall work on used vehicles when a stop-sale order prevents sale and parts are unavailable, with a specified prorated payment and related rules.
What This Bill Does
It adds a new rule that manufacturers must pay dealers for labor and parts needed to perform recalls on used vehicles that are for sale, but only if a federal safety or emissions recall has triggered a stop-sale order and parts are not available for 30 days or more. If parts are unavailable, dealers must receive a prorated payment of at least 1% of the vehicle’s value per month, starting 30 days after the recall notice until parts are available or the vehicle is sold/disposed. The used vehicle value used for calculations is the average trade-in value from an independent guide. The rule applies to specific inventory closely tied to the recall and to line-makes the dealer is franchised to sell or repair.

Who It Affects
New motor vehicle dealers that hold affected used vehicles for sale, who would be eligible to receive compensation for recall-related labor and parts when a stop-sale order is in effect and parts are unavailable.
Manufacturers, distributors, and wholesalers of new motor vehicles, who must compensate dealers under these rules and follow the specified reimbursement and auditing provisions.

Key Provisions
Adds Section 8-20-7.1 to define terms like Manufacturer and Stop-Sale Order and to set scope for recalls affecting used vehicles.
Requires manufacturers to compensate dealers for all labor and parts needed to perform recall repairs, with reasonable compensation amounts.
In cases where parts/remedies are not available for 30 days or more and a Stop-Sale or Do-Not-Drive order is in place, mandates a prorated payment of at least 1% of the vehicle's value per month, starting 30 days after the recall notice until parts are available or the vehicle is sold/disposed.
Uses the average trade-in value from an independent third-party guide to determine the used vehicle’s value for compensation calculations.
Applies only to used vehicles subject to federal safety or emissions recalls with a Stop-Sale/Do-Not-Drive order, held for sale in dealer inventory or acquired as a trade-in, and only for line-makes the dealer is franchised to sell or repair.
Prohibits manufacturers from reducing a dealer’s compensation merely because the dealer filed a reimbursement claim under this section; includes audit provisions and allows uniform treatment across all dealers of the same line-make.
Claims under this section must follow the same limitations as warranty reimbursements, or may be paid under a national recall program if equal to or greater than the subsection (b) amount, or by mutual agreement.
Allows manufacturers to require reasonable, but not unduly burdensome, methods to prove inventory status for eligibility.
Total compensation cannot exceed the vehicle’s total average trade-in value as previously determined, and the remedy is exclusive (cannot be combined with other recall remedies).
Effective date is the first day of the third month after the bill’s passage and gubernatorial approval.

AI-generated summary using openai/gpt-5-nano on Feb 24, 2026. May contain errors — refer to the official bill text for accuracy.
Subjects: Motor Vehicles