Wisconsin Warranty Reimbursement Law

218.0125 Warranty reimbursement.

(1) In this section:

(a) “Dealer cost” means the wholesale cost for a part as listed in the manufacturer’s, importer’s or distributor’s current price schedules or, if the part is not so listed, the dealer’s original invoice cost for the part.

(b) “Qualifying nonwarranty repairs” means nonwarranty repairs that would be covered by the warranty of a manufacturer, importer, or distributor if the vehicle being repaired was covered by the warranty. The term does not include routine maintenance.

(2) A manufacturer, importer, or distributor shall, for the protection of the buying public, specify the delivery and preparation obligations of its dealers before delivery of new motor vehicles to retail buyers. Except for a manufacturer, importer, or distributor of motorcycles with respect to a dealer of the manufacturer’s, importer’s, or distributor’s motorcycles, the specification shall be in writing. A copy of the delivery and preparation obligations of its dealers shall be filed with the department of transportation by every licensed motor vehicle manufacturer, importer, or distributor and shall constitute the dealer’s only responsibility for product liability as between the dealer and the manufacturer, importer, or distributor. Any mechanical, body, or parts defects arising from any warranties of the manufacturer, importer, or distributor shall constitute the manufacturer’s, importer’s, or distributor’s product or warranty liability.

(2m) A manufacturer, importer, or distributor of motorcycles with respect to a dealer of the manufacturer’s, importer’s, or distributor’s motorcycles shall reasonably compensate any authorized dealer who performs work to rectify the manufacturer’s, importer’s, or distributor’s product or warranty defects or delivery and preparation obligations or who performs any other work required, requested, or approved by the manufacturer, importer, or distributor or for which the manufacturer, importer, or distributor has agreed to pay, including compensation for labor at a labor rate equal to the effective labor rate charged all customers and for parts at an amount not less than the amount the dealer charges its other retail service customers for parts used in performing similar work by the dealer.

(3) To be eligible for compensation for parts under sub. (2m), a dealer of motorcycles shall notify the manufacturer, importer, or distributor of motorcycles in writing of the amounts that the dealer charges its other retail service customers for parts and request that it be paid for parts in accordance with this section. The notice may be limited to the dealer’s average markup over dealer cost that the dealer charges its other retail service customers for parts used to perform similar work. The notice shall be served upon the manufacturer, importer, or distributor not less than 30 days before the date on which the dealer requests that the manufacturer, importer, or distributor begin paying the dealer for parts at the stated amounts. The manufacturer, importer, or distributor shall pay the dealer, as provided in this section, at the amounts stated in the dealer notice for parts used in work performed on and after the beginning date stated in the notice. This section applies to a manufacturer, importer, or distributor of motorcycles with respect to a dealer of the manufacturer’s, importer’s, or distributor’s motorcycles and those dealers.

(3m) (a) Subject to sub. (4m), a manufacturer, importer, or distributor, except a manufacturer, importer, or distributor of motorcycles with respect to a dealer of the manufacturer’s, importer’s, or distributor’s motorcycles, shall reasonably compensate a dealer who performs work to rectify the product or warranty defects of the manufacturer, importer, or distributor or to satisfy delivery and preparation obligations of the manufacturer, importer, or distributor or who performs any other work required, requested, or approved by the manufacturer, importer, or distributor or for which the manufacturer, importer, or distributor has agreed to pay.

(b) Reasonable compensation under par. (a) for labor is equal to the dealer’s effective nonwarranty labor rate multiplied by the number of hours allowed for the repair under the manufacturer’s, importer’s, or distributor’s time allowances used in compensating the dealer for warranty work. Reasonable compensation under par. (a) for parts is equal to the dealer’s cost for the parts multiplied by the dealer’s average percentage markup over dealer cost for parts.

(c) 1. The effective nonwarranty labor rate is determined, using the submitted substantiating orders under sub. (4m) (a) 2., by dividing the total customer labor charges for qualifying nonwarranty repairs in the repair orders by the total number of hours that would be allowed for the repairs if the repairs were made under the manufacturer’s, importer’s, or distributor’s time allowances used in compensating the dealer for warranty work.

2. A dealer’s average percentage markup over dealer cost for parts is determined, using the submitted substantiating orders under sub. (4m) (a) 2., by dividing total charges for parts in the repair orders by the total dealer cost for the parts.

(4) The manufacturer, importer, or distributor of motorcycles with respect to a dealer of the manufacturer’s, importer’s, or distributor’s motorcycles may require the dealer, at reasonable intervals, to provide the manufacturer, importer, or distributor with documents or information regarding a reasonable number of sales to other retail service customers of parts used by the dealer to perform similar work in order to substantiate that the amounts requested in the dealer’s notice are consistent with the amounts that the dealer charges its other retail service customers for parts used by the dealer to perform similar work. (4m) (a) To be eligible for compensation for labor or parts under sub. (3m), a dealer shall submit to the manufacturer, importer, or distributor all of the following:

1. A written notice of the claimed effective nonwarranty labor rate or average percentage markup over dealer cost for parts.

2. Either 100 sequential repair orders for qualifying nonwarranty repairs or all repair orders for qualifying nonwarranty repairs performed in a 90-day period, whichever is less. All repair orders under this subdivision must be for repairs made no more than 180 days before the submission. (b) Not more than 30 days after receiving a submission under par. (a), the manufacturer, importer, or distributor shall begin compensating the dealer based on the effective nonwarranty labor rate or average percentage markup over dealer cost for parts that is substantiated by the submission. If the manufacturer, importer, or distributor disputes the dealer’s claimed labor rate or markup, the manufacturer, importer, or distributor shall notify the dealer in writing that it disputes the labor rate or markup. A notice under this paragraph shall include a written explanation of the reason for the dispute, including the labor rate or markup that the manufacturer, importer, or distributor has determined is substantiated by the submission.

(5) A manufacturer, importer, or distributor who fails to compensate a dealer for parts at an amount not less than the amount the dealer charges its other retail service customers for parts used to perform similar work shall not be found to have violated this section if the manufacturer, importer, or distributor shows that, for a manufacturer, importer, or distributor of motorcycles with respect to a dealer of the manufacturer’s, importer’s, or distributor’s motorcycles, the amount is not reasonably competitive to the amounts charged to retail service customers by other similarly situated franchised motor vehicle dealers in this state for the same parts when used by those dealers to perform similar work or, for any other manufacturer, importer, or distributor, the amount is not reasonably competitive to the amounts charged to retail service customers by other similarly situated franchised motor vehicle dealers in this state in performing qualifying nonwarranty repairs.

(6) If a manufacturer, importer or distributor furnishes a part to a dealer at no cost for use by the dealer in performing work for which the manufacturer, importer or distributor is required to compensate the dealer under this section, the manufacturer, importer or distributor shall compensate the dealer for the part at an amount not less than the amount the dealer charges its other retail customers for parts when used to perform similar work less the wholesale cost for the furnished part as listed in the manufacturer’s current price schedules. A manufacturer, importer or distributor may pay the dealer a reasonable handling fee instead of the compensation otherwise required by this section for special high-performance complete engine assemblies furnished to the dealer at no cost, provided that the manufacturer, importer or distributor excludes special high-performance complete engine assemblies in determining whether the amounts requested in the dealer’s notice are consistent with the amounts that the dealer charges its other retail service customers for parts used by the dealer to perform similar work.

(7) A claim made by a franchised motor vehicle dealer for compensation under this section shall be either approved or disapproved within 30 days after the claim is submitted to the manufacturer, importer or distributor in the manner and on the forms the manufacturer, importer or distributor reasonably prescribes. An approved claim shall be paid within 30 days after its approval. If a claim is not specifically disapproved in writing or by electronic transmission within 30 days after the date on which the manufacturer, importer or distributor receives it, the claim shall be considered to be approved and payment shall follow within 30 days. A manufacturer, importer or distributor retains the right to audit claims for a period of one year after the date on which the claim is paid and to charge back any amounts paid on claims that are false or unsubstantiated. If there is evidence of fraud, this subsection does not limit the right of the manufacturer to audit for longer periods and charge back for any fraudulent claim, subject to the limitations period under s. 893.93 (1) (cm).

218.0116 Licenses, how denied, suspended or revoked

(z) 1. In this paragraph, “adverse action” includes all of the following:

a. Increasing a price charged for services or goods.

b. Assessing a penalty, fee, or surcharge.

c. Withholding, reducing, or delaying an incentive or other payment.

d. Transferring or shifting costs.

e. Limiting allocations of vehicles or parts.

f. Failing to act in good faith.

g. Failing to make timely payment of compensation.

h. Establishing or applying a discriminatory standard.

i. Conducting or threatening to conduct a nonroutine or nonrandom audit.

2. Being a manufacturer, importer, or distributor who directly or indirectly takes or threatens to take an adverse action against a dealer for any of the following reasons:

a. For the purpose of recovering costs of compensating dealers under s. 218.0125.

b. In retaliation for a dealer’s exercising a right or seeking a remedy under ss. 218.0101 to 218.0163 or under rules promulgated by the department of transportation under ss. 218.0101 to 218.0163.

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.