New Mexico Warranty Reimbursement State Law


Cliff Notes:

Timeframes for Approval and Reimbursement of Warranty Claims N.M. STAT. ANN. § 57-16-7(D) (C):

• 30 days to pay claim after submitted
• Any claim not specifically disapproved in writing within 30 days following receipt is approved, and the franchisor is required to pay that claim within 30 days of receipt of the claim.
• Warranty work for parts and labor made by dealers under this section shall be submitted to the manufacturer within one year of the date the work was performed.

A dealer shall not be granted an increase in the average percentage markup or labor and diagnostic work rate more than twice in one calendar year. Market analysis is may be needed in NM

Reimbursement Rate for Parts N.M. STAT. ANN. § 57-16-7 (B):
• Retail rates; price paid by the dealer plus dealer’s average percentage markup; determined by 100 sequential customer-paid ROs or 90 consecutive days of the customer- paid service ROs, whichever is less, covering repairs within 180 days before submission.

Reimbursement Rate for Labor N.M. STAT. ANN. § 57-16-7(C):
• A franchisor must compensate a dealer for labor and diagnostic work for recall or warranty repairs at the rates charged by the dealer to its retail customers for such work. A dealer shall establish and declare the dealer’s average customer pay labor rate by submitting to the franchisor the lesser of one hundred sequential customer-paid service repair orders or 90 days of customer-paid service repair orders covering repairs made no more than 180 days before the submission.

2011 New Mexico Statutes Chapter 57: Trade Practices and Regulations

Article 16: Motor Vehicle Dealers Franchising, 57-16-1 through 57-16-16 Section 57-16-7: Warranty claims; payment. Universal Citation: NM Stat § 57-16-7 (1996 through 1st Sess 50th Legis)

57-16-7. Warranty claims; payment.

A. Each manufacturer shall specify in its franchise agreement, or in a separate written agreement, with each of its dealers licensed in this state, the dealer’s obligation to perform warranty work or service on the manufacturer’s products. Each manufacturer shall provide each of its dealers with a schedule of compensation to be paid to the dealer for any warranty work or service, including parts, labor, and diagnostic work, required of the dealer by the manufacturer in connection with the manufacturer’s products. The schedule of compensation for a warranty claim shall not be less than the rates charged by the dealer for similar service to retail customers for non-warranty service and repairs and shall not be less than the schedule of compensation for an existing dealer as of July 1, 2011.

B. The rates charged by the dealer for non-warranty service or work for parts means the price paid by the dealer for those parts, including all shipping and other charges, increased by the franchisee’s average percentage markup. A dealer shall establish and declare the dealer’s average percentage markup by submitting to the manufacturer one hundred sequential customer-paid service repair orders or ninety days of customer-paid service repair orders, whichever is less, covering repairs made no more than one hundred eighty days before the submission. A change in a dealer’s established average percentage markup takes effect thirty days following the submission. A manufacturer shall not require a dealer to establish average percentage markup by another methodology. A manufacturer shall not require information that the dealer believes unduly burdensome or time-consuming to provide, including, but not limited to, part-by-part or transaction-by-transaction calculations.

C. A manufacturer shall compensate a dealer for labor and diagnostic work at the rates charged by the dealer to its retail customers for such work. If a manufacturer can demonstrate that the rates unreasonably exceed those of all other franchised motor vehicle dealers in the same relevant market area offering the same or a competitive motor vehicle line, the manufacturer is not required to honor the rate increase proposed by the dealer. If the manufacturer is not required to honor the rate increase proposed by the dealer, the dealer is entitled to resubmit a new proposed rate for labor and diagnostic work.

D. A dealer shall not be granted an increase in the average percentage markup or labor and diagnostic work rate more than twice in one calendar year.

E. All claims for warranty work for parts and labor made by dealers under this section shall be submitted to the manufacturer within one year of the date the work was performed. All claims submitted must be paid by the manufacturer within thirty days following receipt, provided that the claim has been approved by the manufacturer. The manufacturer has the right to audit claims for warranty work and to charge the dealer for any unsubstantiated, incorrect, or false claims for a period of six months following payment. However, the manufacturer may audit and charge the dealer for any fraudulent claims during any period for which an action for fraud may be commenced under applicable state law.

F. All claims submitted by dealers on the forms and in the manner specified by the manufacturer shall be either approved or disapproved within thirty days following their receipt. The manufacturer shall notify the dealer in writing of any disapproved claim and shall set forth the reasons why the claim was not approved. Any claim not specifically disapproved in writing within thirty days following receipt is approved, and the manufacturer is required to pay that claim within thirty days of receipt of the claim.

G. A manufacturer may not otherwise recover all or any portion of its costs for compensating its dealers licensed in this state for warranty parts and service either by reduction in the amount due to the dealer or by separate charge, surcharge, or other imposition.

H. The provisions of this section shall not apply to recreational travel trailers or to parts of systems, fixtures, appliances, furnishings, accessories, and features of motorhomes.