SB52 Alabama 2022 Session

Summary

Primary Sponsor

Donnie ChesteenSenator

Republican

Session

Regular Session 2022

Title

Motor vehicle dealers, warranty service by dealers paid by manufacturers, reasonable compensation to be paid, determination procedures, Sec. 8-20-7 am'd.

Summary

SB52 changes Alabama law to specify how manufacturers must fairly compensate motor vehicle dealers for pre-delivery and warranty work and lets dealers sue if they can’t reach an agreement.

What This Bill Does

It defines key terms like pre-delivery service, warranty work, and repair orders, and requires warrantors to spell out a dealer’s obligations and provide a written compensation schedule for warranty services. It says compensation must be reasonable and not less than the dealer’s retail rates for similar nonwarranty work, with certain exceptions. It sets a method for dealers to determine their typical warranty rates using either 100 consecutive repair orders or 90 days of closed orders, and explains how to calculate labor rates and parts markups, while listing exclusions. If the dealer and warrantor can’t agree on pay for parts or labor, the dealer can file a civil action within 120 days of a rejection, and if the dealer wins, rate increases can be retroactive to about 45 days after the original submission; the bill also covers payment timelines and audit rights.

Who It Affects

• Motor vehicle dealers in Alabama, who perform pre-delivery and warranty work and who must calculate, negotiate, and possibly challenge compensation for such work.
• Motor vehicle manufacturers, distributors, and other warrantors, who must specify dealer obligations, provide compensation schedules, process claims within set timelines, and respond to rate disputes.

Key Provisions

• Amends Section 8-20-7 to define reasonable compensation for pre-delivery and warranty service and to allow dealers to file a civil action if the dealer and warrantor cannot agree on compensation.
• Defines terms: pre-delivery service, repair order, qualified repair, qualified repair order, warrantor, and warranty work.
• Requires warrantors to specify the dealer’s obligation for warranty and pre-delivery service and to provide a written schedule of compensation, including parts, work, and time allowances.
• Requires compensation for warranty services to be reasonable, including diagnostic work, service, labor, and parts, and not less than retail rates for nonwarranty service, with certain exclusions.
• Sets claim payment rules (within 30 days after approval), audit rights for fraud (up to 12 months), and timely disposition of claims (30 days to approve or disapprove).
• Establishes a method to determine reasonable compensation: dealers may submit repair orders to establish labor rates and parts markups using either 100 consecutive repair orders or 90 consecutive days of orders, whichever yields fewer orders.
• Details how to calculate labor rate (total labor charges divided by hours) and parts markup (calculated from total parts charges and total cost of parts purchased, minus 1, times 100).
• Excludes several categories from rate calculations, including promotions, dealer-owned vehicles, routine maintenance, installations of accessories, tires/wheels, vehicle reconditioning, certain inspections, government discounts, certain body shop repairs, parts without numbers, goodwill repairs, and window-related parts.
• If a dealer and warrantor cannot agree, the dealer may file a civil action within 120 days of rejection; the warrantor must prove the submitted rate was incomplete, inaccurate, or unreasonable. If the dealer wins, rate increases are retroactive to about 45 days after the original submission.
• Allows consideration of factors like prevailing wage rates in the state to determine what is reasonable.

AI-generated summary using openai/gpt-5-nano on Feb 22, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Motor Vehicles