2023 New York Laws › VAT - Vehicle and Traffic › Title 4 - Registration of Vehicles › Article 17-A - Franchised Motor Vehicle Dealer Act › 465 - Procedures Relating to Warranties and Sales Incentives.

§ 465. Procedures  relating  to  warranties and sales incentives.   1.
  Every franchisor shall properly fulfill any  warranty  agreement  and/or
  franchisor's   service   contract  and  shall  compensate  each  of  its
  franchised motor vehicle dealers for warranty parts and labor in amounts
  which reflect reasonable compensation for such work. All warranty claims
  and/or claims under a franchisor's service contract made  by  franchised
  motor  vehicle  dealers shall be paid within thirty days following their
  approval. For  parts  reimbursement,  other  than  components,  systems,
  fixtures,  appliances,  furnishings, accessories and features of a house
  coach that are designed, used and maintained primarily for  nonvehicular
  residential   purposes,   and   for   labor   reimbursement,  reasonable
  compensation shall not be less than the price and rate  charged  by  the
  franchised motor vehicle dealer for like services to non-warranty and/or
  non-service  contract customers. For purposes of this section, the price
  and rate charged by the franchised motor vehicle dealer for parts may be
  established by submitting  to  the  franchisor  one  hundred  sequential
  nonwarranty  customer-paid  service  repair  orders  or  the  number  of
  sequential  nonwarranty  customer-paid  service  repair  orders  written
  within  a ninety day period, whichever is less, covering repairs made no
  more than one hundred eighty days before the submission,  and  declaring
  the  price  and  rate, including average markup for the franchised motor
  vehicle dealer as its reimbursement  rate.  The  reimbursement  rate  so
  declared  shall go into effect thirty days following the declaration and
  shall be presumed to be reasonable, however a franchisor may rebut  such
  presumption  by showing that such rate so established is unreasonable in
  light of the practices of all other franchised motor vehicle dealers  in
  the  vicinity  offering the same line make. The franchised motor vehicle
  dealer shall not request a change in the reimbursement rate  more  often
  than once in each calendar year. In establishing the labor reimbursement
  rate, the franchisor shall not require a franchised motor vehicle dealer
  to  establish  said  rate by a methodology, or by requiring information,
  that is unduly burdensome or time consuming to provide,  including,  but
  not  limited  to,  a  transaction  by  transaction  calculation. For the
  purposes of this section, the following parts or types of repairs  shall
  be   excluded   from   the  parts  and/or  labor  calculations  and  the
  franchisor's reimbursement requirements under this  section:  (a)  parts
  sold  at wholesale; (b) tires; (c) routine maintenance not covered under
  any retail customer warranty such  as  fluids,  filters  and  belts  not
  provided  in  the course of repairs; (d) vehicle reconditioning; and (e)
  batteries replaced as part of a routine maintenance  operation.  If  the
  franchisor  rejects the declaration or attempts to rebut the declaration
  because of an error in the dealer's  submission,  the  franchisor  shall
  identify  with  specificity  the  reason  for rejection and identify the
  error or errors within the  submission.  In  the  event  the  franchisor
  rejects  or  rebuts  the  dealer's initial declaration, the dealer shall
  have the opportunity,  within  sixty  days  to  resubmit  the  full  and
  corrected  declaration addressing the alleged error or errors identified
  by the franchisor. The franchisor shall respond within sixty  days.  The
  one hundred eighty day requirement for the repair orders shall be stayed
  from  the  date  of initial submission. In any action or proceeding held
  pursuant to this subdivision, the franchisor shall have  the  burden  of
  proving  that  the  rate  declared  by  the  dealer  was unreasonable as
  described in this subdivision and that the proposed  adjustment  of  the
  average  percentage  markup or rejection of the submission is reasonable
  pursuant to the provisions of this subdivision.
2. All warranty or sales incentive claims shall be either approved  or
  disapproved  within thirty days after their receipt. When any such claim
  is disapproved the franchised motor vehicle dealer shall be notified  in

  writing  of  its  disapproval within said period. Each such notice shall
  state the specific grounds upon which the disapproval is based.  Failure
  to disapprove a claim within thirty days shall be deemed approval.
3.  No  franchisor  shall conduct an audit or charge back any warranty
  payment, or  any  sales,  advertising  or  marketing  incentive  payment
  ("incentive  payments")  or  otherwise  hold  a franchised motor vehicle
  dealer liable for charges more than one year, or five years in the  case
  of fraud, after the date the franchisor made such payment to the dealer,
  without providing a notice to a franchised motor vehicle dealer of, or a
  mechanism  that  makes  available  to a franchised motor vehicle dealer,
  information regarding errors or issues regarding such dealer's warranty,
  sales, advertising or marketing incentive claims that are the subject of
  the audit or chargeback. Nothing in this  section  shall  be  deemed  to
  grant  a  dealer  the  right to access any file held by the manufacturer
  evaluating  such  dealer.  In  connection  with  a  claim  for  warranty
  reimbursements,  the dealer's failure to document properly one part of a
  warranty repair that contains more than one part shall not be  the  sole
  basis  to charge back the entire repair. A manufacturer shall not deny a
  claim submitted under this section based solely on a dealer's incidental
  failure to comply  with  a  specific  claim  processing  requirement,  a
  clerical  error, or other administrative technicality, provided that the
  failure does not call into question the legitimacy of the claim and that
  the dealer corrects the claim according to franchisor guidelines.
4. A franchisor shall not charge  a  dealer  back  subsequent  to  the
  payment  of  a warranty, sales, advertising or marketing incentive claim
  unless a representative of the franchisor  has  met  in  person  at  the
  dealership,  or  by telephone, with an officer or employee of the dealer
  designated by the dealer and explained in detail the basis for  each  of
  the   proposed   charge   backs   and   thereafter  given  the  dealer's
  representative a reasonable opportunity at the meeting,  or  during  the
  telephone call, to explain the dealer's position relating to each of the
  proposed charge backs. In the event the dealer was selected for audit or
  review  on the basis that some or all of the dealer's claims were viewed
  as  excessive  in  comparison  to  average,  mean  or   aggregate   data
  accumulated  by  the franchisor, or in relation to claims submitted by a
  group of other franchisees, the franchisor shall, at  or  prior  to  the
  meeting  or telephone call with the dealer's representative, provide the
  dealer with a written statement containing the basis or methodology upon
  which the dealer was selected for audit or review.
5. A franchisor shall not deny or charge back a payment  for  warranty
  work claimed by the dealer unless the franchisor satisfies its burden of
  proof  that  the  dealer did not make a good faith effort to comply with
  the reasonable written procedures of the franchisor or that  the  dealer
  did not actually perform the work.
6.  A franchisor shall not deny or charge back a sales, advertising or
  marketing incentive payment made  to  a  dealer  unless  the  claim  was
  materially  false  or  fraudulent  or  the  dealer  failed to reasonably
  substantiate the claim in accordance with the manufacturer's  reasonable
  procedures.
7.  After  all  internal dispute resolution processes provided through
  the franchisor have been resolved, the franchisor shall give  notice  to
  the   dealer  of  the  final  amount  of  a  proposed  warranty,  sales,
  advertising or marketing incentive charge back. If the dealer institutes
  an action pursuant to this article within thirty days of receipt of such
  notice, the proposed charge back shall be stayed, without  bond,  during
  the  pendency  of  such  action  and  until  the final judgment has been
  rendered in an adjudicatory proceeding or action as provided in  section
  four hundred sixty-nine of this article. The franchisor shall not impose

  the  chargeback, debit the dealer's account, or otherwise seek to obtain
  all or any part of the chargeback  funds  from  the  dealer  during  the
  thirty-day  period  in  which  the dealer has the opportunity to file an
  action as set forth above.