§ 9-32-13-15.5 — Compensation for warranty services

Indiana § 9-32-13-15.5

• Jurisdiction: Indiana
• Title 9: MOTOR VEHICLES
• Art. 32: DEALER SERVICES
• Ch. 13: Unfair Practices

Text

5. (a) This section does not apply to
manufacturers or distributors of manufactured housing, heavy duty
vocational vehicles (as defined in 49 CFR 523.8), or recreational
vehicles.
(b) Unless otherwise agreed, it is an unfair practice for a
manufacturer or distributor to fail to compensate a dealer anything less
than the dealer's retail rates for parts or labor the dealer uses in
performing the warranty services of the manufacturer or distributor, or
for a manufacturer or distributor of a separate vehicle component or
major vehicle assembly that is warranted independently of the motor
vehicle to fail to compensate a dealer anything less than the dealer's
retail rate for the parts or labor the dealer uses in performing the
warranty services of the manufacturer or distributor. The dealer's retail
rate for parts must be a percentage determined by dividing the total
charges for parts used in warranty like repairs by the dealer's total cost
for those parts minus one (1) in the lesser of one hundred (100)
customer paid sequential repair orders or ninety (90) consecutive days
of customer paid repair orders. The dealer's retail rate for labor shall be
determined by dividing the total labor sales for warranty like repairs by
the number of hours that generated those sales in one hundred (100)
customer paid sequential repair orders or ninety (90) consecutive days
of customer paid repair orders. A retail rate may be calculated based
upon only customer paid repair orders charged within one hundred
eighty (180) days before the date the dealer submits the declaration.
(c) The dealer's submission for retail rates must include a
declaration of the dealer's retail rates for parts or labor along with the
supporting service repair orders paid by customers. A manufacturer or
distributor may challenge the dealer's declaration by submitting a
rebuttal not later than sixty (60) days after the date the declaration was
received. If the manufacturer or distributor does not send a timely
rebuttal to the dealer, the retail rate is established as reasonable and
goes into effect automatically.
(d) If a rebuttal in subsection (c) is timely sent, the rebuttal must
substantiate how the dealer's declaration is unreasonable or materially
inaccurate. The rebuttal must propose an adjusted retail rate and
provide written support for the proposed adjustments. If the dealer does
not agree with the adjusted retail rate, the dealer may file a complaint
with the dealer services division within the office of the secretary of
state.
(e) A complaint filed under subsection (d) must be filed not later
than thirty (30) days after the dealer receives the manufacturer's or
distributor's rebuttal.
(f) When calculating the retail rate customarily charged by the
dealer for parts or labor under this section, the following work may not
be included:
(1) Repairs for manufacturer or distributor special events,
specials, or promotional discounts for retail customer repairs.
(2) Parts sold or repairs performed at wholesale.
(3) Routine maintenance not covered under a retail customer
warranty, such as fluids, filters, and belts not provided in the
course of repairs.
(4) Nuts, bolts, fasteners, and similar items that do not have an
individual part number.
(5) Vehicle reconditioning.
(6) Accessories.
(7) Repairs of damage caused by a collision, a road hazard, the
force of the elements, vandalism, or theft.
(8) Vehicle emission or safety inspections required by law.
(9) Manufacturer or distributor reimbursed goodwill or policy
repairs or replacements.
(10) Replacement of tires.
(g) If a manufacturer or distributor furnishes a part or component to
a dealer at no cost to use in performing repairs under a recall, campaign
service, or warranty repair, the manufacturer or distributor shall
compensate the dealer for the part or component in the same manner
as warranty parts compensation under this section by compensating the
dealer the average markup on the cost for the part or component as
listed in the manufacturer's or distributor's initial or original price
schedule minus the cost for the part or component.
(h) A manufacturer or distributor may not require a dealer to
establish the retail rate customarily charged by the dealer for parts or
labor by an unduly burdensome or time consuming method or by
requiring information that is unduly burdensome or time consuming to
provide, including part by part or transaction by transaction
calculations. A dealer may not declare an average percentage parts
markup or average labor rate more than once in a twelve (12) month
period. A manufacturer or distributor may perform annual audits to
verify that a dealer's effective rates have not decreased. If a dealer's
effective rates have decreased, a manufacturer or distributor may
reduce the warranty reimbursement rate prospectively. A dealer may
elect to revert to the nonretail rate reimbursement for parts or labor not
more than once in a twelve (12) month period.
(i) A manufacturer or distributor may not impose a surcharge on a
dealer for the purpose of recovering any of its costs related to the
reimbursement of a dealer for parts or labor required under this section.
This subsection does not prohibit a manufacturer or distributor from
increasing the wholesale price of a vehicle or part in the ordinary
course of business.
(j) If a dealer files a complaint with the dealer services division
within the office of the secretary of state, the warranty reimbursement
rate in effect before any mediation or complaint remains in effect until
thirty (30) days after:
(1) a final decision has been issued by a court with jurisdiction;
and
(2) all appeals have been exhausted.

Legislative History

As added by P.L.167-2016, SEC.2. Amended by P.L.112-2018, SEC.2; P.L.284-2019, SEC.36; P.L.92-2025, SEC.4.