Oregon Warranty Reimbursement State Law


Cliff Notes:

Timeframes for Approval and reimbursement of Warranty Claims OR. REV. STAT. § 650.158(4)(a) (b) (c) (2) (a):
• 30 days to approve or reject the claim.
• If no written rejection within 30 days with grounds for rejection, the claim is deemed approved.
• 30 days to pay after approval.

• Warranty service must be the amount the dealer charges non-warranty customers, as long as the amount is not unreasonable. (May require a market analysis)

Reimbursement Rate for Parts OR. REV. STAT. § 650.158(1)-(2):
• 100 sequential customer-paid ROs or 90 consecutive days of customer-paid service ROs, whichever is less, covering repairs within 180 days before submission.

Reimbursement Rate for Labor OR. REV. STAT. § 650.158(1)-(2):
• No less than the retail rate.
• 100 sequential customer-paid ROs or 90 consecutive days of customer-paid service ROs, whichever is less, covering repairs within 180 days before submission.

2017 ORS 650.158¹

Predelivery preparation and warranty service

• notice to dealers

• schedule of compensation

• determination

• claims by dealers

RelatedStatutes

(1) Each manufacturer, distributor or importer shall specify in writing to each of the manufacturer’s, distributor’s or importer’s dealers in this state:

(a) The dealer’s obligations for predelivery preparation and warranty service on the manufacturer’s, distributor’s or importer’s motor vehicles;

(b) Thescheduleofcompensationthemanufacturer, distributor or importer will pay the dealer for parts, work and service in connection with predelivery preparation and warranty service; and

(c) The time allowances for performing pre-delivery preparation and warranty service.

(2)(a) A schedule of compensation must include reasonable compensation for diagnostic work, repair service, and labor. Time allowances for diagnosing and performing predelivery and warranty service must be reasonable and adequate for the work to be performed. A manufacturer, distributor, or importer may not pay an hourly rate to a dealer that is less than the rate the dealer charges non-warranty customers for non-warranty service and repairs. Reimbursement for parts, other than parts used to repair the living facilities of motor homes, that the dealer purchases for use in performing predelivery and warranty service must be the amount the dealer charges non-warranty customers, as long as the amount is not unreasonable.

(b)(A) For purposes of this subsection and subject to subparagraphs (B) and (C) of this paragraph, to determine compensation under this subsection, a dealer shall propose an hourly rate and an amount for parts that the dealer charges non-warranty customers by submitting to the manufacturer, distributor or importer copies of 100 sequential non-warranty service repair invoices that customers paid or 90 consecutive days’ worth of non-warranty service invoices that customers paid, whichever is less, for repairs the dealer made not more than 180 days before the dealer’s submission. If the manufacturer, distributor or importer does not contest the dealer’s proposal and the dealer otherwise complies with the provisions of this paragraph, the dealer’s proposal is presumed to be fair and reasonable.

(B) A manufacturer, distributor or importer may contest the dealer’s proposal with evidence that the dealer’s proposal is not accurate or on the basis that the dealer’s proposal does not reasonably conform with the hourly rate or the amount for parts that other dealers charge non-warranty customers in the same line-make in market areas that are contiguous to the dealer’s market area or with other relevant evidence. In contesting a dealer’s proposal based on evidence from other dealers in the contiguous market area, a manufacturer, distributor or importer shall rely on evidence from at least three other dealers in the contiguous market area or three dealers in an economically similar market within the manufacturer’s, distributor’s or importer’s region.

(C) A dealer may not include in the dealer’s proposal:

(i) Repairs for a manufacturer’s, distributor’s or importer’s specials, special events or promotional discounts for retail customer repairs;

(ii) Parts sold at wholesale;

(iii) Routine maintenance that a retail customer warranty does not cover, such as fluids, filters, and belts that a dealer uses in performing work other than repairs;

(iv) Nuts, bolts, fasteners, and similar items that do not have an individual part number; and (v)Vehiclereconditioning.
(c) The hourly rate or the amount for parts that a dealer charges non-warranty customers that the dealer proposes under paragraph (b)(A) of this subsection becomes effective 30 days after the manufacturer, distributor or importer approves the hourly rate or the amount for parts. For purposes of this paragraph, a manufacturer, distributor or importer approves the dealer’s proposal if the manufacturer, distributor or importer does not contest the proposed hourly rate or amount for parts within 30 days after the dealer submits the proposal.

(d) If a manufacturer, distributor or importer contests a dealer’s proposal, the manufacturer, distributor or importer shall propose an adjustment to the dealer’s proposal not later than 30 days after the dealer submits the dealer’s proposal.

(e) Once per year, a manufacturer, distributor or importer may verify the dealer’s hourly rate or the amount for parts the dealer charges non-warranty customers. If the manufacturer, distributor or importer finds that the dealer’s hourly rate or the amount for parts has decreased, the manufacturer, distributor, or importer may reduce the dealer’s compensation under this subsection prospectively.

(3) A manufacturer, distributor or importer shall include, in written notices of vehicle recalls to motor vehicle owners and dealers, the expected date by which necessary parts and equipment will be available to the dealers to correct the defect or defects. A manufacturer, distributor or importer shall adequately compensate a dealer for repair service the dealer performs under the recall.

(4) A manufacturer, distributor or importer shall:

(a) Pay or credit a dealer for labor or parts the dealer claims under this section within 30 days after approving the dealer’s claim;

(b) Approve or disapprove, in the manner the manufacturer, distributors importer specifies,all claims that a dealer makes for labor or parts within 30 days after receiving the claim;

(c) Treat as approved any claim that a manufacturer, distributor or importer did not approve or disapprove within 30 days after the manufacturer, distributor or importer received the claim and pay or credit the dealer for the claim within 60 days after receiving the claim; and

(d) Notify the dealer in writing of the manufacturer’s, distributor’s or importer’s grounds for disapproving a claim.

(5) A manufacturer, distributor or importer may not:

(a) Recover all or a portion of the cost of compensating a dealer for warranty parts or service by reducing the amount due a dealer or by imposing a separate charge, surcharge, administrative fee or other fee.

(b) Deny or chargeback a dealer’s claim solely because a dealer failed to comply with a specific claim processing procedure because of a clerical or administrative error that does not affect the legitimacy of the dealer’s claim if the dealer resubmits the claim in compliance with the manufacturer’s, distributor’s or importer’s claim processing procedure within 45 days after the manufacturer, distributor or importer initially denies or charges back the claim. [1991 c.609 §3; 1999 c.660 §5; 2013 c.329 §3; 2015 c.584§4]

1 Legislative Counsel Committee, CHAPTER 650—Franchise Transactions, https://www.-oregonlegislature.gov/bills_laws/ors/ors650.html(2017) (last accessed Mar. 30, 2018).

2 OregonLaws.org contains the contents of Volume 21 of the ORS, inserted alongside the pertinent statutes. See the preface to the ORS Annotations for more information.

3 OregonLaws.org assembles these lists by analyzing references between Sections. Each listed item refers back to the current Section in its own text. The result reveals relationships in the code that may not have otherwise been apparent.

https://www.oregonlaws.org/ors/650.158