Arkansas Warranty Reimbursement Law

§ 23-112-310 Delivery, preparation, and warranty obligations

(a) thru (c) [Delivery, prep, warranty obligations; factory & dealer liability

(d)(1)

(A) A manufacturer, distributor, distributor branch or division, or factory or division branch shall not pay to any of its motor vehicle dealers a labor rate per hour or parts rate for warranty work that is less than that charged by the dealer to its retail customers, provided the rate is reasonable compared to other same line-make dealers in the dealer’s relevant market area or the dealer’s competitive market area.

(B) Conversely, a dealer shall not charge to its manufacturer, distributor, distributor branch or division, or factory branch or division a labor rate per hour or parts rate in excess of the rate charged to its retail customers.

(C) [motorcycles].

(D)(i) A motor vehicle dealer may request a change in the labor rate per hour for warranty work or parts markup for warranty work, and the manufacturer, distributor, distributor branch or division, or factory or division branch shall approve or disapprove the request within forty-five (45) days from the date the request is received.

(ii) A request submitted under subdivision (d)(1)(D)(i) of this section is approved if a manufacturer, distributor, distributor branch or division, or factory or division branch fails to approve or disapprove the request within forty-five (45) days from the date the request for a change in the labor rate per hour for warranty work or parts markup for warranty work is received.

(iii) If the manufacturer or distributor determines, from any set of repair orders submitted under subdivision (d)(1)(D)(i) of this section that the labor rate per hour for warranty work or the parts markup for warranty work is substantially higher or lower than the rate currently on record with the manufacturer or distributor, then the manufacturer or distributor may request additional documentation for a period of either forty-five (45) days prior or forty-five (45) days subsequent to the time period for which the repair orders were submitted.

§ 23-112-313. Warranty agreements

(a) Every manufacturer, distributor, wholesaler, distributor branch or division, factory branch or division, or wholesale branch or division shall properly fulfill any warranty or recall campaign agreements and adequately and fairly compensate each of its motor vehicle dealers for labor and parts.

(b) The compensation shall not fail to include reasonable compensation for diagnostic work, repair service, labor, and parts.

(c)(1) Time allowances for the diagnosis and performance of warranty or recall campaign work and service shall be reasonable and adequate for the work to be performed.

(2) In the determination of what constitutes reasonable compensation for warranty or recall campaign work and service under this subsection subject to section 23-112-310(d)(1)(A), the principal factor to be considered is the labor rate per hour or parts rate that is charged by the motor vehicle dealer to the motor vehicle dealer’s customers, exclusive of routine maintenance performed on a vehicle.

(3) The compensation of a motor vehicle dealer for warranty or recall campaign service and parts shall not be less than the rates charged by the motor vehicle dealer for like service to retail customers for nonwarranty service and repairs and parts, provided the rate is reasonable.

(4) The motor vehicle dealer shall calculate the labor rate by dividing the amount of the motor vehicle dealer’s total labor sales from any qualified repair orders by the total labor hours that generated the labor charges in the qualified repair orders.

(5) The motor vehicle dealer shall calculate the rate for parts by:

(A) Determining the total charges for parts from the qualified repair orders submitted; and

(B) Dividing the total charges under subdivision (c)(5)(A) of this section by the motor vehicle dealer’s total cost of the purchase of those parts, subtracting one (1), and multiplying by one hundred (100) to produce a percentage.

(6)(A) As used in this section, “qualified repair order” means a customer pay repair order paid by a retail customer, exclusive of routine maintenance performed on the vehicle.

(B) Qualified repair orders used to calculate the labor rate and rate for parts under this section shall be qualified repair orders from the lesser of a:

(i) Reasonable look-back period not to exceed one hundred (100) sequential customer pay repair orders with repair dates covering repairs made no more than one hundred eighty (180) days before the submission of the qualified repair order request; or

(ii) Ninety-day look-back period with repair dates covering repairs made no more than one hundred eighty (180) days before the submission of the qualified repair order.

(C)(i) No repair order shall be excluded from the markup computation solely because it contains repairs using nonoriginal equipment manufacturer parts.

(ii) However, only the portion of the repair order that uses original equipment manufacturer parts shall be included in the computation of the motor vehicle dealer’s rate for parts.

(7) For the purposes of this section, a motor vehicle dealer shall submit a written request to be compensated under this section.

(d)(1)(A) The pricing for a recalled part shall not be reduced to an amount that is less than the original dealer cost or price for the same part unless the manufacturer obtains a discounted rate for the recalled part from a supplier.

(B) A recalled part is considered the same part if it is substantially the same part regardless of the part number.

(2) A part-by-part analysis is not required to determine the retail rate for parts.

(3) The parts mark-up shall not be substituted for a handling allowance or similar pricing amount that results in the reduction of compensation for the dealer.

(e)[individual claims]

(f) As used in this section, “routine maintenance” means motor vehicle upkeep not covered under the manufacturer’s warranty, including without limitation tire rotations and the replacement of:

(1) Tires;

(2) Fluids;

(3) Filters;

(4) Batteries;

(5) Belts;

(6) Windshield wipers; and

(7) Brake pads.

Although the statutory text provided above represented that codified and in effect in the respective state at the time of publication of the above, Armatus Dealer Uplift, LLC bears no responsibility for deviations of the above from versions thereof subsequently in effect as a result of future statutory amendments.