{"formats":[{"name":"JSON","format":"json","url":"\/downloads\/2025\/code-json\/46.2-1571.json"},{"name":"Plain Text","format":"text","url":"\/downloads\/2025\/code-text\/46.2-1571.txt"},{"name":"XML","format":"xml","url":"\/downloads\/2025\/code-xml\/46.2-1571.xml"},{"name":"HTML","format":"html","url":"\/downloads\/2025\/code-html\/46.2-1571.html"}],"law_id":60902,"edition_id":1,"section_id":60902,"structure_id":15134,"section_number":"46.2-1571","catch_line":"Recall, warranty, maintenance and sales incentive obligations","history":"1988, c. 865, \u00a7 46.1-550.5:30; 1989, cc. 365, 727; 1990, c. 250; 1991, c. 92; 1992, c. 135; 1993, c. 90; 1994, c. 783; 1995, cc. 421, 477; 1997, c. 484; 1998, c. 681; 2001, cc. 80, 89; 2006, cc. 809, 818; 2007, c. 830; 2009, cc. 173, 176; 2010, cc. 284, 318; 2013, cc. 260, 630; 2016, cc. 432, 534; 2022, cc. 715, 752; 2023, cc. 310, 311; 2025, cc. 546, 558.","full_text":"A\n\nEach motor vehicle manufacturer, factory branch, distributor, or distributor branch shall (i) specify in writing to each of its motor vehicle dealers licensed in the Commonwealth the dealer’s obligations for preparation, delivery, recall, and warranty service on its products and (ii) compensate the dealer for recall or warranty parts, service, and diagnostic work required of the dealer by the manufacturer or distributor as follows:1\n\nCompensation of a dealer for recall or warranty parts, service, and diagnostic work shall not be less than the amounts charged by the dealer for the manufacturer’s or distributor’s original parts, service, and diagnostic work to retail customers for nonwarranty service, parts, and diagnostic work installed or performed in the dealer’s service department. All manufacturer or distributor compensated parts, service, diagnostic work, updates to a vehicle accessory or function, or initialization or repair of a vehicle part, system, accessory, or function performed by the dealer shall be subject to this subsection. Diagnostic work shall include all time spent by a technician who meets the manufacturer’s or distributor’s qualifications and requirements for the repair work communicating with the manufacturer’s technical assistance or external manufacturer source in order to complete a warranty repair. Recall or warranty parts compensation shall be stated as a percentage of markup, which shall be an agreed reasonable approximation of retail markup and which shall be uniformly applied to all of the manufacturer’s or distributor’s parts unless otherwise provided for in this section. If the dealer and manufacturer or distributor cannot agree on the recall or warranty parts compensation markup to be paid to the dealer, the markup shall be determined by an average of the dealer’s retail markup on all of the manufacturer’s or distributor’s parts as described in subdivisions 2 and 3.2\n\nFor purposes of determining recall or warranty parts and service compensation paid to a dealer by the manufacturer or distributor, including body-shop repairs, only retail repair orders, or the retail portion of repair orders containing retail and non-retail operations, shall be considered. For the purposes of this section, “retail” does not include menu-priced parts or services, services and parts used in internal repairs paid by the dealer, group discounts, special event discounts, special event promotions, and insurance-paid repairs.3\n\nIncreases in dealer recall or warranty parts and service compensation and diagnostic work compensation, pursuant to this section, shall be requested by the dealer in writing, shall be based on 100 consecutive repair orders or all repair orders over a 90-day period, whichever occurs first. If any portion of a retail repair order includes amounts that are not retail, such portion shall be excluded. Compensation for parts shall be stated as a percentage of markup that shall be uniformly applied to all the manufacturer’s or distributor’s parts. Compensation for parts used in a recall or similar repair, not including warranty repairs, shall be based on the highest price of such parts in the 12 months before the recall or similar repair is announced to dealers. If the manufacturer or distributor changes the parts number or similar designation of a part, the price of such part established pursuant to this subdivision shall be determined by the price of such part before such change.4\n\nIn the case of recall or warranty parts compensation, the provisions of this subsection shall be effective only for model year 1992 and succeeding model years.5\n\nIf a manufacturer or distributor furnishes a part to a dealer at no cost for use by the dealer in performing work for which the manufacturer or distributor is required to compensate the dealer under this section, the manufacturer or distributor shall compensate the dealer for the part in the same manner as recall or warranty parts compensation, less the wholesale costs, for such part as listed in the manufacturer’s current price schedules. A manufacturer or distributor may pay the dealer a reasonable handling fee instead of the compensation otherwise required by this subsection for special high-performance complete engine assemblies in limited production motor vehicles that constitute less than five percent of model production furnished to the dealer at no cost, if the manufacturer or distributor excludes such special high-performance complete engine assemblies in determining whether the amounts requested by the dealer for recall or warranty compensation are consistent with the amounts that the dealer charges its other retail service customers for parts used by the dealer to perform similar work.6\n\nIn the case of service work, manufacturer original parts or parts otherwise specified by the manufacturer or distributor, and parts provided by a dealer either pursuant to an adjustment program as defined in § 59.1-207.34 or as otherwise requested by the manufacturer or distributor, the dealer shall be compensated in the same manner as for recall or warranty service or parts.\n\t\t\t\tThis section does not apply to compensation for parts such as components, systems, fixtures, appliances, furnishings, accessories, and features that are designed, used, and maintained primarily for nonvehicular, residential purposes. Recall, warranty, and sales incentive audits of dealer records may be conducted by the manufacturer, factory branch, distributor, or distributor branch on a reasonable basis, and dealer claims for recall, warranty, or sales incentive compensation shall not be denied except for good cause, such as performance of nonwarranty repairs, lack of material documentation, fraud, or misrepresentation. A dealer’s failure to comply with the specific requirements of the manufacturer or distributor for processing the claim shall not constitute grounds for the denial of the claim or reduction of the amount of compensation to the dealer as long as reasonable documentation or other evidence has been presented to substantiate the claim. The manufacturer, factory branch, distributor, or distributor branch shall not deny a claim or reduce the amount of compensation to the dealer for recall or warranty repairs to resolve a condition discovered by the dealer during the course of a separate repair requested by the customer or to resolve a condition on the basis of advice or recommendation by the dealer. Claims for dealer compensation shall be paid within 30 days of dealer submission or within 30 days of the end of an incentive program or rejected in writing for stated reasons. The manufacturer, factory branch, distributor, or distributor branch shall allow a dealer to submit a claim for rental vehicle reimbursement as required pursuant to subdivision B 5, in 30-day increments, prior to the end of the rental vehicle period if the repair for which the rental vehicle is associated is open due to a delay in parts or repair information from the manufacturer, factory branch, distributor, or distributor branch. The manufacturer, factory branch, distributor, or distributor branch shall reserve the right to reasonable periodic audits to determine the validity of all such paid claims for dealer compensation. Any chargebacks for recall or warranty parts or service compensation and service incentives shall only be for the six-month period immediately following the date of the claim and, in the case of chargebacks for sales compensation only, for the six-month period immediately following the date of claim. The manufacturer, factory branch, distributor, or distributor branch may audit and charge back, pursuant to this paragraph, claims for rental vehicle reimbursement for the six-month period immediately following the date of payment of the claim for the warranty or recall repair associated with such rental. However, such limitations shall not be effective if a manufacturer, factory branch, distributor, or distributor branch has reasonable cause to believe that a claim submitted by a dealer is intentionally false or fraudulent. For purposes of this section, “reasonable cause” means a bona fide belief based upon evidence that the material issues of fact are such that a person of ordinary caution, prudence, and judgment could believe that a claim was intentionally false or fraudulent. A dealer shall not be charged back or otherwise liable for sales incentives or charges related to a motor vehicle sold by the dealer to a purchaser other than a licensed, franchised motor vehicle dealer and subsequently exported or resold, unless the manufacturer, factory branch, distributor, or distributor branch can demonstrate by a preponderance of the evidence that the dealer should have known of and did not exercise due diligence in discovering the purchaser’s intention to export or resell the motor vehicle.B\n\nIt shall be unlawful for any motor vehicle manufacturer, factory branch, distributor, or distributor branch to:1\n\nFail to perform any of its recall or warranty obligations, including tires, with respect to a motor vehicle;2\n\nFail to assume all responsibility for any liability resulting from structural or production defects;3\n\nFail to include in written notices of factory recalls to vehicle owners and dealers the expected date by which necessary parts and equipment will be available to dealers for the correction of defects;4\n\nFail to compensate any of the motor vehicle dealers licensed in the Commonwealth for repairs effected by the dealer of merchandise damaged in manufacture or transit to the dealer where the carrier is designated by the manufacturer, factory branch, distributor, or distributor branch;5\n\nFail to fully compensate its motor vehicle dealers licensed in the Commonwealth for recall or warranty parts, work, and service pursuant to subsection A either by reduction in the amount due to the dealer or by separate charge, surcharge, or other imposition by which the motor vehicle manufacturer, factory branch, distributor, or distributor branch seeks to recover its costs of complying with subsection A, or for legal costs and expenses incurred by such dealers in connection with recall or warranty obligations for which the manufacturer, factory branch, distributor, or distributor branch is legally responsible or which the manufacturer, factory branch, distributor, or distributor branch imposes upon the dealer. Failure to fully reimburse a dealer for the cost to the dealer of a rental vehicle provided to a customer as required, offered, advertised as available, or agreed to by the manufacturer or distributor shall be considered a violation of this subsection. A dealer’s inability to provide a specified type of vehicle, including line-make, size, or category, from the rental market shall not be grounds to refuse to fully reimburse a dealer under this subdivision. Failure to provide compensation consistent with this section to a dealer for assistance requested by a customer whose vehicle was subjected to an over-the-air or remote change, repair, or update to any part, system, accessory, or function by the vehicle manufacturer or distributor and performed at the dealership to satisfy the customer shall be considered a violation of this subsection;6\n\nMisrepresent in any way to purchasers of motor vehicles that warranties with respect to the manufacture, performance, or design of the vehicle are made by the dealer, either as warrantor or co-warrantor;7\n\nRequire the dealer to make warranties to customers in any manner related to the manufacture, performance, or design of the vehicle;8\n\nShift or attempt to shift to the motor vehicle dealer, directly or indirectly, any liabilities of the manufacturer, factory branch, distributor or distributor branch under the Virginia Motor Vehicle Warranty Enforcement Act (§ 59.1-207.9 et seq.), unless such liability results from the act or omission by the dealer;9\n\nDeny any dealer the right to return any part or accessory that the dealer has not sold within 12 months where the part or accessory was not obtained through a specific order initiated by the dealer but instead was specified for, sold to and shipped to the dealer pursuant to an automated ordering system, provided that such part or accessory is in the condition required for return to the manufacturer, factory branch, distributor, or distributor branch, and the dealer returns the part within 30 days of it becoming eligible under this subdivision. For purposes of this subdivision, an “automated ordering system” is a computerized system that automatically specifies parts and accessories for sale and shipment to the dealer without specific order thereof initiated by the dealer. The manufacturer, factory branch, distributor, or distributor branch shall not charge a restocking or handling fee for any part or accessory being returned under this subdivision. This subdivision shall not apply if the manufacturer, factory branch, distributor, or distributor branch has available to the dealer an alternate system for ordering parts and accessories that provides for shipment of ordered parts and accessories to the dealer within the same time frame as the dealer would receive them when ordered through the automated ordering system. Notwithstanding the provisions of this subdivision, the manufacturer, factory branch, distributor, or distributor branch shall not deny any dealer the right to return, within 12 months of the date of purchase, any part or accessory needed to complete a recall or similar repair for compensation and the manufacturer, factory branch, distributor, or distributor branch is prohibited from deeming such part obsolete or nonreturnable by removing it from current parts codes or catalogs; or10\n\nWhen providing a new motor vehicle to a dealer for offer or sale to the public, fail to provide to such dealer a written disclosure that may be provided to a potential buyer of the new motor vehicle of each accessory or function of the vehicle that may be initiated, updated, changed, or maintained by the manufacturer or distributor through over-the-air or remote means, and the charge to the customer at the time of the new motor vehicle sale for such initiation, update, change, or maintenance. A manufacturer or distributor may comply with this subdivision by notifying the dealer that such information is available on a website or by other digital means.C\n\nNotwithstanding the terms of any franchise, it shall be unlawful for any motor vehicle manufacturer, factory branch, distributor, or distributor branch to fail to indemnify and hold harmless its motor vehicle dealers against any losses or damages arising out of complaints, claims, or suits relating to the manufacture, assembly, or design of motor vehicles, parts, or accessories, or other functions by the manufacturer, factory branch, distributor, or distributor branch beyond the control of the dealer, including, without limitation, the selection by the manufacturer, factory branch, distributor, or distributor branch of parts or components for the vehicle or any damages to merchandise occurring in transit to the dealer where the carrier is designated by the manufacturer, factory branch, distributor, or distributor branch. The dealer shall notify the manufacturer of pending suits in which allegations are made that come within this subsection whenever reasonably practicable to do so. Every motor vehicle dealer franchise issued to, amended, or renewed for motor vehicle dealers in Virginia shall be construed to incorporate provisions consistent with the requirements of this subsection.D\n\nOn any new motor vehicle, any uncorrected damage or any corrected damage exceeding three percent of the manufacturer’s or distributor’s suggested retail price as defined in 15 U.S.C. \u00a7\u00a7 1231 -1233, as measured by retail repair costs, must be disclosed to the dealer in writing prior to delivery. Factory mechanical repair and damage to glass, tires, and bumpers are excluded from the three percent rule when properly replaced by identical manufacturer’s or distributor’s original equipment or parts. Whenever a new motor vehicle is damaged in transit, when the carrier or means of transportation is determined by the manufacturer or distributor, or whenever a motor vehicle is otherwise damaged prior to delivery to the new motor vehicle dealer, the new motor vehicle dealer shall:1\n\nNotify the manufacturer or distributor of the damage within three business days from the date of delivery of the new motor vehicle to the new motor vehicle dealership or within the additional time specified in the franchise; and2\n\nRequest from the manufacturer or distributor authorization to replace the components, parts, and accessories damaged or otherwise correct the damage, unless the damage to the vehicle exceeds the three percent rule, in which case the dealer may reject the vehicle within three business days.E\n\nIf the manufacturer or distributor refuses or fails to authorize correction of such damage within 10 days after receipt of notification, or if the dealer rejects the vehicle because damage exceeds the three percent rule, ownership of the new motor vehicle shall revert to the manufacturer or distributor, and the new motor vehicle dealer shall have no obligation, financial or otherwise, with respect to such motor vehicle. Should either the manufacturer, distributor, or the dealer elect to correct the damage or any other damage exceeding the three percent rule, full disclosure shall be made by the dealer in writing to the buyer and an acknowledgement by the buyer is required. If there is less than three percent damage, no disclosure is required, provided the damage has been corrected. Predelivery mechanical work shall not require a disclosure. Failure to disclose any corrected damage within the knowledge of the selling dealer to a new motor vehicle in excess of the three percent rule shall constitute grounds for revocation of the buyer order, provided that, within 30 days of purchase, the motor vehicle is returned to the dealer with an accompanying written notice of the grounds for revocation. In case of revocation pursuant to this section, the dealer shall accept the vehicle and refund any payments made to the dealer in connection with the transaction, less a reasonable allowance for the consumer’s use of the vehicle as defined in § 59.1-207.11. Nothing in this section shall be construed to exempt from the provisions of this section damage to a new motor vehicle that occurs following delivery of the vehicle to the dealer.F\n\nIf there is a dispute between the manufacturer, factory branch, distributor, or distributor branch and the dealer with respect to any matter referred to in subsection A, B, or C, either party may petition the Commissioner in writing, within 30 days after either party has given written notice of the dispute to the other, for a hearing. The decision of the Commissioner shall be binding on the parties, subject to rights of judicial review and appeal as provided in Chapter 40 (§ 2.2-4000 et seq.) of Title 2.2. However, nothing contained in this section shall give the Commissioner any authority as to the content or interpretation of any manufacturer’s or distributor’s warranty. A manufacturer, factory branch, distributor, or distributor branch may not collect chargebacks, fully or in part, either through direct payment or by charge to the dealer’s account, for recall or warranty parts or service compensation, including service incentives, sales incentives, other sales compensation, surcharges, fees, penalties, or any financial imposition of any type arising from an alleged failure of the dealer to comply with a policy of, directive from, or agreement with the manufacturer, factory branch, distributor, or distributor branch until 40 days following final notice of the amount charged to the dealer following all internal processes of the manufacturer, factory, factory branch, distributor, or distributor branch. Within 30 days following receipt of such final notice, the dealer may petition the Commissioner, in writing, for a hearing. If a dealer requests such a hearing, the manufacturer, factory branch, distributor, or distributor branch may not collect the chargeback, fully or in part, either through direct payment or by charge to the dealer’s account, until the completion of the hearing and a final decision of the Commissioner concerning the validity of the chargeback.","order_by":null,"text":{"0":{"id":222726,"text":"Each motor vehicle manufacturer, factory branch, distributor, or distributor branch shall (i) specify in writing to each of its motor vehicle dealers licensed in the Commonwealth the dealer’s obligations for preparation, delivery, recall, and warranty service on its products and (ii) compensate the dealer for recall or warranty parts, service, and diagnostic work required of the dealer by the manufacturer or distributor as follows:","type":"section","prefixes":["A"],"prefix":"A","entire_prefix":"A","prefix_anchor":"A","level":1,"next_prefix":"A1"},"1":{"id":222727,"text":"Compensation of a dealer for recall or warranty parts, service, and diagnostic work shall not be less than the amounts charged by the dealer for the manufacturer’s or distributor’s original parts, service, and diagnostic work to retail customers for nonwarranty service, parts, and diagnostic work installed or performed in the dealer’s service department. All manufacturer or distributor compensated parts, service, diagnostic work, updates to a vehicle accessory or function, or initialization or repair of a vehicle part, system, accessory, or function performed by the dealer shall be subject to this subsection. Diagnostic work shall include all time spent by a technician who meets the manufacturer’s or distributor’s qualifications and requirements for the repair work communicating with the manufacturer’s technical assistance or external manufacturer source in order to complete a warranty repair. Recall or warranty parts compensation shall be stated as a percentage of markup, which shall be an agreed reasonable approximation of retail markup and which shall be uniformly applied to all of the manufacturer’s or distributor’s parts unless otherwise provided for in this section. If the dealer and manufacturer or distributor cannot agree on the recall or warranty parts compensation markup to be paid to the dealer, the markup shall be determined by an average of the dealer’s retail markup on all of the manufacturer’s or distributor’s parts as described in subdivisions 2 and 3.","type":"section","prefixes":["A","1"],"prefix":"1","entire_prefix":"A1","prefix_anchor":"A1","level":2,"prior_prefix":"A","next_prefix":"A2"},"2":{"id":222728,"text":"For purposes of determining recall or warranty parts and service compensation paid to a dealer by the manufacturer or distributor, including body-shop repairs, only retail repair orders, or the retail portion of repair orders containing retail and non-retail operations, shall be considered. For the purposes of this section, “retail” does not include menu-priced parts or services, services and parts used in internal repairs paid by the dealer, group discounts, special event discounts, special event promotions, and insurance-paid repairs.","type":"section","prefixes":["A","2"],"prefix":"2","entire_prefix":"A2","prefix_anchor":"A2","level":2,"prior_prefix":"A1","next_prefix":"A3"},"3":{"id":222729,"text":"Increases in dealer recall or warranty parts and service compensation and diagnostic work compensation, pursuant to this section, shall be requested by the dealer in writing, shall be based on 100 consecutive repair orders or all repair orders over a 90-day period, whichever occurs first. If any portion of a retail repair order includes amounts that are not retail, such portion shall be excluded. Compensation for parts shall be stated as a percentage of markup that shall be uniformly applied to all the manufacturer’s or distributor’s parts. Compensation for parts used in a recall or similar repair, not including warranty repairs, shall be based on the highest price of such parts in the 12 months before the recall or similar repair is announced to dealers. If the manufacturer or distributor changes the parts number or similar designation of a part, the price of such part established pursuant to this subdivision shall be determined by the price of such part before such change.","type":"section","prefixes":["A","3"],"prefix":"3","entire_prefix":"A3","prefix_anchor":"A3","level":2,"prior_prefix":"A2","next_prefix":"A4"},"4":{"id":222730,"text":"In the case of recall or warranty parts compensation, the provisions of this subsection shall be effective only for model year 1992 and succeeding model years.","type":"section","prefixes":["A","4"],"prefix":"4","entire_prefix":"A4","prefix_anchor":"A4","level":2,"prior_prefix":"A3","next_prefix":"A5"},"5":{"id":222731,"text":"If a manufacturer or distributor furnishes a part to a dealer at no cost for use by the dealer in performing work for which the manufacturer or distributor is required to compensate the dealer under this section, the manufacturer or distributor shall compensate the dealer for the part in the same manner as recall or warranty parts compensation, less the wholesale costs, for such part as listed in the manufacturer’s current price schedules. A manufacturer or distributor may pay the dealer a reasonable handling fee instead of the compensation otherwise required by this subsection for special high-performance complete engine assemblies in limited production motor vehicles that constitute less than five percent of model production furnished to the dealer at no cost, if the manufacturer or distributor excludes such special high-performance complete engine assemblies in determining whether the amounts requested by the dealer for recall or warranty compensation are consistent with the amounts that the dealer charges its other retail service customers for parts used by the dealer to perform similar work.","type":"section","prefixes":["A","5"],"prefix":"5","entire_prefix":"A5","prefix_anchor":"A5","level":2,"prior_prefix":"A4","next_prefix":"A6"},"6":{"id":222732,"text":"In the case of service work, manufacturer original parts or parts otherwise specified by the manufacturer or distributor, and parts provided by a dealer either pursuant to an adjustment program as defined in § 59.1-207.34 or as otherwise requested by the manufacturer or distributor, the dealer shall be compensated in the same manner as for recall or warranty service or parts.\n\t\t\t\tThis section does not apply to compensation for parts such as components, systems, fixtures, appliances, furnishings, accessories, and features that are designed, used, and maintained primarily for nonvehicular, residential purposes. Recall, warranty, and sales incentive audits of dealer records may be conducted by the manufacturer, factory branch, distributor, or distributor branch on a reasonable basis, and dealer claims for recall, warranty, or sales incentive compensation shall not be denied except for good cause, such as performance of nonwarranty repairs, lack of material documentation, fraud, or misrepresentation. A dealer’s failure to comply with the specific requirements of the manufacturer or distributor for processing the claim shall not constitute grounds for the denial of the claim or reduction of the amount of compensation to the dealer as long as reasonable documentation or other evidence has been presented to substantiate the claim. The manufacturer, factory branch, distributor, or distributor branch shall not deny a claim or reduce the amount of compensation to the dealer for recall or warranty repairs to resolve a condition discovered by the dealer during the course of a separate repair requested by the customer or to resolve a condition on the basis of advice or recommendation by the dealer. Claims for dealer compensation shall be paid within 30 days of dealer submission or within 30 days of the end of an incentive program or rejected in writing for stated reasons. The manufacturer, factory branch, distributor, or distributor branch shall allow a dealer to submit a claim for rental vehicle reimbursement as required pursuant to subdivision B 5, in 30-day increments, prior to the end of the rental vehicle period if the repair for which the rental vehicle is associated is open due to a delay in parts or repair information from the manufacturer, factory branch, distributor, or distributor branch. The manufacturer, factory branch, distributor, or distributor branch shall reserve the right to reasonable periodic audits to determine the validity of all such paid claims for dealer compensation. Any chargebacks for recall or warranty parts or service compensation and service incentives shall only be for the six-month period immediately following the date of the claim and, in the case of chargebacks for sales compensation only, for the six-month period immediately following the date of claim. The manufacturer, factory branch, distributor, or distributor branch may audit and charge back, pursuant to this paragraph, claims for rental vehicle reimbursement for the six-month period immediately following the date of payment of the claim for the warranty or recall repair associated with such rental. However, such limitations shall not be effective if a manufacturer, factory branch, distributor, or distributor branch has reasonable cause to believe that a claim submitted by a dealer is intentionally false or fraudulent. For purposes of this section, “reasonable cause” means a bona fide belief based upon evidence that the material issues of fact are such that a person of ordinary caution, prudence, and judgment could believe that a claim was intentionally false or fraudulent. A dealer shall not be charged back or otherwise liable for sales incentives or charges related to a motor vehicle sold by the dealer to a purchaser other than a licensed, franchised motor vehicle dealer and subsequently exported or resold, unless the manufacturer, factory branch, distributor, or distributor branch can demonstrate by a preponderance of the evidence that the dealer should have known of and did not exercise due diligence in discovering the purchaser’s intention to export or resell the motor vehicle.","type":"section","prefixes":["A","6"],"prefix":"6","entire_prefix":"A6","prefix_anchor":"A6","level":2,"prior_prefix":"A5","next_prefix":"B"},"7":{"id":222733,"text":"It shall be unlawful for any motor vehicle manufacturer, factory branch, distributor, or distributor branch to:","type":"section","prefixes":["B"],"prefix":"B","entire_prefix":"B","prefix_anchor":"B","level":1,"prior_prefix":"A6","next_prefix":"B1"},"8":{"id":222734,"text":"Fail to perform any of its recall or warranty obligations, including tires, with respect to a motor vehicle;","type":"section","prefixes":["B","1"],"prefix":"1","entire_prefix":"B1","prefix_anchor":"B1","level":2,"prior_prefix":"B","next_prefix":"B2"},"9":{"id":222735,"text":"Fail to assume all responsibility for any liability resulting from structural or production defects;","type":"section","prefixes":["B","2"],"prefix":"2","entire_prefix":"B2","prefix_anchor":"B2","level":2,"prior_prefix":"B1","next_prefix":"B3"},"10":{"id":222736,"text":"Fail to include in written notices of factory recalls to vehicle owners and dealers the expected date by which necessary parts and equipment will be available to dealers for the correction of defects;","type":"section","prefixes":["B","3"],"prefix":"3","entire_prefix":"B3","prefix_anchor":"B3","level":2,"prior_prefix":"B2","next_prefix":"B4"},"11":{"id":222737,"text":"Fail to compensate any of the motor vehicle dealers licensed in the Commonwealth for repairs effected by the dealer of merchandise damaged in manufacture or transit to the dealer where the carrier is designated by the manufacturer, factory branch, distributor, or distributor branch;","type":"section","prefixes":["B","4"],"prefix":"4","entire_prefix":"B4","prefix_anchor":"B4","level":2,"prior_prefix":"B3","next_prefix":"B5"},"12":{"id":222738,"text":"Fail to fully compensate its motor vehicle dealers licensed in the Commonwealth for recall or warranty parts, work, and service pursuant to subsection A either by reduction in the amount due to the dealer or by separate charge, surcharge, or other imposition by which the motor vehicle manufacturer, factory branch, distributor, or distributor branch seeks to recover its costs of complying with subsection A, or for legal costs and expenses incurred by such dealers in connection with recall or warranty obligations for which the manufacturer, factory branch, distributor, or distributor branch is legally responsible or which the manufacturer, factory branch, distributor, or distributor branch imposes upon the dealer. Failure to fully reimburse a dealer for the cost to the dealer of a rental vehicle provided to a customer as required, offered, advertised as available, or agreed to by the manufacturer or distributor shall be considered a violation of this subsection. A dealer’s inability to provide a specified type of vehicle, including line-make, size, or category, from the rental market shall not be grounds to refuse to fully reimburse a dealer under this subdivision. Failure to provide compensation consistent with this section to a dealer for assistance requested by a customer whose vehicle was subjected to an over-the-air or remote change, repair, or update to any part, system, accessory, or function by the vehicle manufacturer or distributor and performed at the dealership to satisfy the customer shall be considered a violation of this subsection;","type":"section","prefixes":["B","5"],"prefix":"5","entire_prefix":"B5","prefix_anchor":"B5","level":2,"prior_prefix":"B4","next_prefix":"B6"},"13":{"id":222739,"text":"Misrepresent in any way to purchasers of motor vehicles that warranties with respect to the manufacture, performance, or design of the vehicle are made by the dealer, either as warrantor or co-warrantor;","type":"section","prefixes":["B","6"],"prefix":"6","entire_prefix":"B6","prefix_anchor":"B6","level":2,"prior_prefix":"B5","next_prefix":"B7"},"14":{"id":222740,"text":"Require the dealer to make warranties to customers in any manner related to the manufacture, performance, or design of the vehicle;","type":"section","prefixes":["B","7"],"prefix":"7","entire_prefix":"B7","prefix_anchor":"B7","level":2,"prior_prefix":"B6","next_prefix":"B8"},"15":{"id":222741,"text":"Shift or attempt to shift to the motor vehicle dealer, directly or indirectly, any liabilities of the manufacturer, factory branch, distributor or distributor branch under the Virginia Motor Vehicle Warranty Enforcement Act (§ 59.1-207.9 et seq.), unless such liability results from the act or omission by the dealer;","type":"section","prefixes":["B","8"],"prefix":"8","entire_prefix":"B8","prefix_anchor":"B8","level":2,"prior_prefix":"B7","next_prefix":"B9"},"16":{"id":222742,"text":"Deny any dealer the right to return any part or accessory that the dealer has not sold within 12 months where the part or accessory was not obtained through a specific order initiated by the dealer but instead was specified for, sold to and shipped to the dealer pursuant to an automated ordering system, provided that such part or accessory is in the condition required for return to the manufacturer, factory branch, distributor, or distributor branch, and the dealer returns the part within 30 days of it becoming eligible under this subdivision. For purposes of this subdivision, an “automated ordering system” is a computerized system that automatically specifies parts and accessories for sale and shipment to the dealer without specific order thereof initiated by the dealer. The manufacturer, factory branch, distributor, or distributor branch shall not charge a restocking or handling fee for any part or accessory being returned under this subdivision. This subdivision shall not apply if the manufacturer, factory branch, distributor, or distributor branch has available to the dealer an alternate system for ordering parts and accessories that provides for shipment of ordered parts and accessories to the dealer within the same time frame as the dealer would receive them when ordered through the automated ordering system. Notwithstanding the provisions of this subdivision, the manufacturer, factory branch, distributor, or distributor branch shall not deny any dealer the right to return, within 12 months of the date of purchase, any part or accessory needed to complete a recall or similar repair for compensation and the manufacturer, factory branch, distributor, or distributor branch is prohibited from deeming such part obsolete or nonreturnable by removing it from current parts codes or catalogs; or","type":"section","prefixes":["B","9"],"prefix":"9","entire_prefix":"B9","prefix_anchor":"B9","level":2,"prior_prefix":"B8","next_prefix":"B10"},"17":{"id":222743,"text":"When providing a new motor vehicle to a dealer for offer or sale to the public, fail to provide to such dealer a written disclosure that may be provided to a potential buyer of the new motor vehicle of each accessory or function of the vehicle that may be initiated, updated, changed, or maintained by the manufacturer or distributor through over-the-air or remote means, and the charge to the customer at the time of the new motor vehicle sale for such initiation, update, change, or maintenance. A manufacturer or distributor may comply with this subdivision by notifying the dealer that such information is available on a website or by other digital means.","type":"section","prefixes":["B","10"],"prefix":"10","entire_prefix":"B10","prefix_anchor":"B10","level":2,"prior_prefix":"B9","next_prefix":"C"},"18":{"id":222744,"text":"Notwithstanding the terms of any franchise, it shall be unlawful for any motor vehicle manufacturer, factory branch, distributor, or distributor branch to fail to indemnify and hold harmless its motor vehicle dealers against any losses or damages arising out of complaints, claims, or suits relating to the manufacture, assembly, or design of motor vehicles, parts, or accessories, or other functions by the manufacturer, factory branch, distributor, or distributor branch beyond the control of the dealer, including, without limitation, the selection by the manufacturer, factory branch, distributor, or distributor branch of parts or components for the vehicle or any damages to merchandise occurring in transit to the dealer where the carrier is designated by the manufacturer, factory branch, distributor, or distributor branch. The dealer shall notify the manufacturer of pending suits in which allegations are made that come within this subsection whenever reasonably practicable to do so. Every motor vehicle dealer franchise issued to, amended, or renewed for motor vehicle dealers in Virginia shall be construed to incorporate provisions consistent with the requirements of this subsection.","type":"section","prefixes":["C"],"prefix":"C","entire_prefix":"C","prefix_anchor":"C","level":1,"prior_prefix":"B10","next_prefix":"D"},"19":{"id":222745,"text":"On any new motor vehicle, any uncorrected damage or any corrected damage exceeding three percent of the manufacturer’s or distributor’s suggested retail price as defined in 15 U.S.C. \u00a7\u00a7 1231 -1233, as measured by retail repair costs, must be disclosed to the dealer in writing prior to delivery. Factory mechanical repair and damage to glass, tires, and bumpers are excluded from the three percent rule when properly replaced by identical manufacturer’s or distributor’s original equipment or parts. Whenever a new motor vehicle is damaged in transit, when the carrier or means of transportation is determined by the manufacturer or distributor, or whenever a motor vehicle is otherwise damaged prior to delivery to the new motor vehicle dealer, the new motor vehicle dealer shall:","type":"section","prefixes":["D"],"prefix":"D","entire_prefix":"D","prefix_anchor":"D","level":1,"prior_prefix":"C","next_prefix":"D1"},"20":{"id":222746,"text":"Notify the manufacturer or distributor of the damage within three business days from the date of delivery of the new motor vehicle to the new motor vehicle dealership or within the additional time specified in the franchise; and","type":"section","prefixes":["D","1"],"prefix":"1","entire_prefix":"D1","prefix_anchor":"D1","level":2,"prior_prefix":"D","next_prefix":"D2"},"21":{"id":222747,"text":"Request from the manufacturer or distributor authorization to replace the components, parts, and accessories damaged or otherwise correct the damage, unless the damage to the vehicle exceeds the three percent rule, in which case the dealer may reject the vehicle within three business days.","type":"section","prefixes":["D","2"],"prefix":"2","entire_prefix":"D2","prefix_anchor":"D2","level":2,"prior_prefix":"D1","next_prefix":"E"},"22":{"id":222748,"text":"If the manufacturer or distributor refuses or fails to authorize correction of such damage within 10 days after receipt of notification, or if the dealer rejects the vehicle because damage exceeds the three percent rule, ownership of the new motor vehicle shall revert to the manufacturer or distributor, and the new motor vehicle dealer shall have no obligation, financial or otherwise, with respect to such motor vehicle. Should either the manufacturer, distributor, or the dealer elect to correct the damage or any other damage exceeding the three percent rule, full disclosure shall be made by the dealer in writing to the buyer and an acknowledgement by the buyer is required. If there is less than three percent damage, no disclosure is required, provided the damage has been corrected. Predelivery mechanical work shall not require a disclosure. Failure to disclose any corrected damage within the knowledge of the selling dealer to a new motor vehicle in excess of the three percent rule shall constitute grounds for revocation of the buyer order, provided that, within 30 days of purchase, the motor vehicle is returned to the dealer with an accompanying written notice of the grounds for revocation. In case of revocation pursuant to this section, the dealer shall accept the vehicle and refund any payments made to the dealer in connection with the transaction, less a reasonable allowance for the consumer’s use of the vehicle as defined in § 59.1-207.11. Nothing in this section shall be construed to exempt from the provisions of this section damage to a new motor vehicle that occurs following delivery of the vehicle to the dealer.","type":"section","prefixes":["E"],"prefix":"E","entire_prefix":"E","prefix_anchor":"E","level":1,"prior_prefix":"D2","next_prefix":"F"},"23":{"id":222749,"text":"If there is a dispute between the manufacturer, factory branch, distributor, or distributor branch and the dealer with respect to any matter referred to in subsection A, B, or C, either party may petition the Commissioner in writing, within 30 days after either party has given written notice of the dispute to the other, for a hearing. The decision of the Commissioner shall be binding on the parties, subject to rights of judicial review and appeal as provided in Chapter 40 (§ 2.2-4000 et seq.) of Title 2.2. However, nothing contained in this section shall give the Commissioner any authority as to the content or interpretation of any manufacturer’s or distributor’s warranty. A manufacturer, factory branch, distributor, or distributor branch may not collect chargebacks, fully or in part, either through direct payment or by charge to the dealer’s account, for recall or warranty parts or service compensation, including service incentives, sales incentives, other sales compensation, surcharges, fees, penalties, or any financial imposition of any type arising from an alleged failure of the dealer to comply with a policy of, directive from, or agreement with the manufacturer, factory branch, distributor, or distributor branch until 40 days following final notice of the amount charged to the dealer following all internal processes of the manufacturer, factory, factory branch, distributor, or distributor branch. Within 30 days following receipt of such final notice, the dealer may petition the Commissioner, in writing, for a hearing. If a dealer requests such a hearing, the manufacturer, factory branch, distributor, or distributor branch may not collect the chargeback, fully or in part, either through direct payment or by charge to the dealer’s account, until the completion of the hearing and a final decision of the Commissioner concerning the validity of the chargeback.","type":"section","prefixes":["F"],"prefix":"F","entire_prefix":"F","prefix_anchor":"F","level":1,"prior_prefix":"E"}},"ancestry":[{"id":15134,"edition_id":1,"name":"Franchises","identifier":"7","label":"article","depth":4,"order_by":1,"parent_id":13356,"metadata":{},"date_created":"2026-06-26 03:52:26","date_modified":"2026-06-26 03:52:26","permalink":{"id":231519,"object_type":"structure","relational_id":15134,"identifier":"7","token":"46.2\/IV\/15\/7","url":"\/46.2\/IV\/15\/7\/","edition_id":1,"permalink":0,"preferred":1}},{"id":13356,"edition_id":1,"name":"Motor Vehicle Dealers","identifier":"15","label":"chapter","depth":3,"order_by":1,"parent_id":13355,"metadata":{},"date_created":"2026-06-26 03:44:42","date_modified":"2026-06-26 03:44:42","permalink":{"id":231067,"object_type":"structure","relational_id":13356,"identifier":"15","token":"46.2\/IV\/15","url":"\/46.2\/IV\/15\/","edition_id":1,"permalink":0,"preferred":1}},{"id":13355,"edition_id":1,"name":"Dealers and Driver Training Schools","identifier":"IV","label":"subtitle","depth":2,"order_by":1,"parent_id":12770,"metadata":{},"date_created":"2026-06-26 03:44:42","date_modified":"2026-06-26 03:44:42","permalink":{"id":231065,"object_type":"structure","relational_id":13355,"identifier":"IV","token":"46.2\/IV","url":"\/46.2\/IV\/","edition_id":1,"permalink":0,"preferred":1}},{"id":12770,"edition_id":1,"name":"Motor Vehicles","identifier":"46.2","label":"title","depth":1,"order_by":1,"parent_id":null,"metadata":{},"date_created":"2026-06-26 03:43:52","date_modified":"2026-06-26 03:43:52","permalink":{"id":225289,"object_type":"structure","relational_id":12770,"identifier":"46.2","token":"46.2","url":"\/46.2\/","edition_id":1,"permalink":0,"preferred":1}}],"structure_contents":[{"id":81977,"structure_id":15134,"section_number":"46.2-1566","catch_line":"Filing of franchises","url":"\/46.2-1566\/","token":"46.2\/IV\/15\/7\/46.2-1566","metadata":false},{"id":75377,"structure_id":15134,"section_number":"46.2-1567","catch_line":"Exemption of franchises from Retail Franchising Act","url":"\/46.2-1567\/","token":"46.2\/IV\/15\/7\/46.2-1567","metadata":false},{"id":85096,"structure_id":15134,"section_number":"46.2-1568","catch_line":"Coercion of retail dealer by manufacturer or distributor with respect to retail installment sales contracts, extended service contracts or extended maintenance plans, financing, or leasing prohibited; penalty","url":"\/46.2-1568\/","token":"46.2\/IV\/15\/7\/46.2-1568","metadata":false},{"id":74199,"structure_id":15134,"section_number":"46.2-1568.1","catch_line":"Discrimination by manufacturers or distributors prohibited","url":"\/46.2-1568.1\/","token":"46.2\/IV\/15\/7\/46.2-1568.1","metadata":false},{"id":60913,"structure_id":15134,"section_number":"46.2-1569","catch_line":"Other coercion of dealers; transfer, grant, succession to and cancellation of dealer franchises; delivery of vehicles, parts, and accessories","url":"\/46.2-1569\/","token":"46.2\/IV\/15\/7\/46.2-1569","metadata":false},{"id":57658,"structure_id":15134,"section_number":"46.2-1569.1","catch_line":"Manufacturer or distributor right of first refusal","url":"\/46.2-1569.1\/","token":"46.2\/IV\/15\/7\/46.2-1569.1","metadata":false},{"id":85388,"structure_id":15134,"section_number":"46.2-1570","catch_line":"Discontinuation of distributors","url":"\/46.2-1570\/","token":"46.2\/IV\/15\/7\/46.2-1570","metadata":false},{"id":60902,"structure_id":15134,"section_number":"46.2-1571","catch_line":"Recall, warranty, maintenance and sales incentive obligations","url":"\/46.2-1571\/","token":"46.2\/IV\/15\/7\/46.2-1571","metadata":false},{"id":67472,"structure_id":15134,"section_number":"46.2-1572","catch_line":"Operation of dealership by manufacturer","url":"\/46.2-1572\/","token":"46.2\/IV\/15\/7\/46.2-1572","metadata":false},{"id":75339,"structure_id":15134,"section_number":"46.2-1572.1","catch_line":"Ownership of service facilities","url":"\/46.2-1572.1\/","token":"46.2\/IV\/15\/7\/46.2-1572.1","metadata":false},{"id":75995,"structure_id":15134,"section_number":"46.2-1572.2","catch_line":"Mediation of disputes","url":"\/46.2-1572.2\/","token":"46.2\/IV\/15\/7\/46.2-1572.2","metadata":false},{"id":65117,"structure_id":15134,"section_number":"46.2-1572.3","catch_line":"Waiver prohibited","url":"\/46.2-1572.3\/","token":"46.2\/IV\/15\/7\/46.2-1572.3","metadata":false},{"id":74526,"structure_id":15134,"section_number":"46.2-1572.4","catch_line":"Manufacturer or distributor use of performance standards","url":"\/46.2-1572.4\/","token":"46.2\/IV\/15\/7\/46.2-1572.4","metadata":false},{"id":69981,"structure_id":15134,"section_number":"46.2-1573","catch_line":"Hearings and other remedies; civil penalties","url":"\/46.2-1573\/","token":"46.2\/IV\/15\/7\/46.2-1573","metadata":false},{"id":84529,"structure_id":15134,"section_number":"46.2-1573.01","catch_line":"Recovery of attorney's fees","url":"\/46.2-1573.01\/","token":"46.2\/IV\/15\/7\/46.2-1573.01","metadata":false},{"id":67893,"structure_id":15134,"section_number":"46.2-1573.02","catch_line":"Limited right of dealers to sell new motor vehicles following termination of franchise","url":"\/46.2-1573.02\/","token":"46.2\/IV\/15\/7\/46.2-1573.02","metadata":false}],"previous_section":{"id":85388,"structure_id":15134,"section_number":"46.2-1570","catch_line":"Discontinuation of distributors","url":"\/46.2-1570\/","token":"46.2\/IV\/15\/7\/46.2-1570","metadata":false},"next_section":{"id":67472,"structure_id":15134,"section_number":"46.2-1572","catch_line":"Operation of dealership by manufacturer","url":"\/46.2-1572\/","token":"46.2\/IV\/15\/7\/46.2-1572","metadata":false},"metadata":false,"official_url":"https:\/\/law.lis.virginia.gov\/vacode\/46.2-1571\/","history_text":"

This law was first created in 1988. The record of its establishment is cataloged in chapter 865 of that year\u2019s edition of \u201cActs of Assembly,\u201d the annual state publication listing all changes made to the Code of Virginia in that year. Unfortunately, the 1988 \u201cActs\u201d aren\u2019t available online. It has been modified 19 times. Those modifications are cataloged by \u201cThe Acts of Assembly,\u201d a state publication, by year and chapter. Those modifications that can be read on the General Assembly\u2019s website will be linked accordingly. Those modifications are as follows: in 1989, chapters 365 and 727; in 1990, chapter 250; in 1991, chapter 92; in 1992, chapter 135; in 1993, chapter 90; in 1994, chapter 783<\/a>; in 1995, chapters 421<\/a> and 477<\/a>; in 1997, chapter 484<\/a>; in 1998, chapter 681<\/a>; in 2001, chapters 80<\/a> and 89<\/a>; in 2006, chapters 809<\/a> and 818<\/a>; in 2007, chapter 830<\/a>; in 2009, chapters 173<\/a> and 176<\/a>; in 2010, chapters 284<\/a> and 318<\/a>; in 2013, chapters 260<\/a> and 630<\/a>; in 2016, chapters 432<\/a> and 534<\/a>; in 2022, chapters 715<\/a> and 752<\/a>; in 2023, chapters 310<\/a> and 311<\/a>; in 2025, chapters 546<\/a> and 558<\/a>.<\/p>","references":[{"id":60913,"section_number":"46.2-1569","catch_line":"Other coercion of dealers; transfer, grant, succession to and cancellation of dealer franchises; delivery of vehicles, parts, and accessories","order_by":null,"url":"\/46.2-1569\/"}],"refers_to":[{"id":86911,"section_number":"2.2-4000","catch_line":"Short title; purpose","order_by":null,"url":"\/2.2-4000\/"},{"id":56957,"section_number":"59.1-207.11","catch_line":"Definitions","order_by":null,"url":"\/59.1-207.11\/"},{"id":63318,"section_number":"59.1-207.34","catch_line":"Definitions","order_by":null,"url":"\/59.1-207.34\/"},{"id":83922,"section_number":"59.1-207.9","catch_line":"Short title","order_by":null,"url":"\/59.1-207.9\/"}],"permalink":{"id":231549,"object_type":"law","relational_id":60902,"identifier":"46.2-1571","token":"46.2\/IV\/15\/7\/46.2-1571","url":"\/46.2-1571\/","edition_id":1,"permalink":0,"preferred":1},"url":"\/46.2-1571\/","token":"46.2\/IV\/15\/7\/46.2-1571","dublin_core":{"Title":"Recall, warranty, maintenance and sales incentive obligations","Type":"Text","Format":"text\/html","Identifier":"\u00a7 46.2-1571","Relation":"Code of Virginia"},"html":"\n\t\t\t\t\t\t

A.<\/span> Each motor vehicle manufacturer<\/span>, factory branch<\/span>, distributor, or distributor branch<\/span> shall (i) specify in writing to each of its motor vehicle dealers<\/span> licensed in the Commonwealth the dealer<\/span>’s obligations for preparation, delivery, recall, and warranty service on its products and (ii) compensate the dealer<\/span> for recall or warranty parts, service, and diagnostic work required of the dealer<\/span> by the manufacturer<\/span> or distributor as follows: <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

1.<\/span> Compensation of a dealer<\/span> for recall or warranty parts, service, and diagnostic work shall not be less than the amounts charged by the dealer<\/span> for the manufacturer<\/span>’s or distributor’s original parts, service, and diagnostic work to retail customers for nonwarranty service, parts, and diagnostic work installed or performed in the dealer<\/span>’s service department<\/span>. All manufacturer<\/span> or distributor compensated parts, service, diagnostic work, updates to a vehicle accessory<\/span> or function, or initialization or repair of a vehicle part, system, accessory<\/span>, or function performed by the dealer<\/span> shall be subject to this subsection. Diagnostic work shall include all time spent by a technician who meets the manufacturer<\/span>’s or distributor’s qualifications and requirements for the repair work communicating with the manufacturer<\/span>’s technical assistance or external manufacturer<\/span> source in order<\/span> to complete a warranty repair. Recall or warranty parts compensation shall be stated as a percentage of markup, which shall be an agreed reasonable approximation of retail markup and which shall be uniformly applied to all of the manufacturer<\/span>’s or distributor’s parts unless otherwise provided for in this section. If the dealer<\/span> and manufacturer<\/span> or distributor cannot agree on the recall or warranty parts compensation markup to be paid to the dealer<\/span>, the markup shall be determined by an average of the dealer<\/span>’s retail markup on all of the manufacturer<\/span>’s or distributor’s parts as described in subdivisions 2 and 3. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

2.<\/span> For purposes of determining recall or warranty parts and service compensation paid to a dealer<\/span> by the manufacturer<\/span> or distributor, including body-shop repairs, only retail repair orders<\/span>, or the retail portion of repair orders<\/span> containing retail and non-retail operations, shall be considered. For the purposes of this section, “retail” does not include menu-priced parts or services, services and parts used<\/span> in internal repairs paid by the dealer<\/span>, group discounts, special event discounts, special event promotions, and insurance-paid repairs. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

3.<\/span> Increases in dealer<\/span> recall or warranty parts and service compensation and diagnostic work compensation, pursuant to this section, shall be requested by the dealer<\/span> in writing, shall be based on 100 consecutive repair orders<\/span> or all repair orders<\/span> over a 90-day period, whichever occurs first. If any portion of a retail repair order<\/span> includes amounts that are not retail, such portion shall be excluded. Compensation for parts shall be stated as a percentage of markup that shall be uniformly applied to all the manufacturer<\/span>’s or distributor’s parts. Compensation for parts used<\/span> in a recall or similar repair, not including warranty repairs, shall be based on the highest price of such parts in the 12 months before the recall or similar repair is announced to dealers. If the manufacturer<\/span> or distributor changes the parts number or similar designation of a part, the price of such part established pursuant to this subdivision shall be determined by the price of such part before such change. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

4.<\/span> In the case of recall or warranty parts compensation, the provisions of this subsection shall be effective only for model year 1992 and succeeding model years. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

5.<\/span> If a manufacturer<\/span> or distributor furnishes a part to a dealer<\/span> at no cost for use by the dealer<\/span> in performing work for which the manufacturer<\/span> or distributor is required to compensate the dealer<\/span> under this section, the manufacturer<\/span> or distributor shall compensate the dealer<\/span> for the part in the same manner as recall or warranty parts compensation, less the wholesale<\/span> costs, for such part as listed in the manufacturer<\/span>’s current price schedules<\/span>. A manufacturer<\/span> or distributor may pay the dealer<\/span> a reasonable handling fee instead of the compensation otherwise required by this subsection for special high-performance complete engine assemblies in limited production motor vehicles<\/span> that constitute less than five percent of model production furnished to the dealer<\/span> at no cost, if the manufacturer<\/span> or distributor excludes such special high-performance complete engine assemblies in determining whether the amounts requested by the dealer<\/span> for recall or warranty compensation are consistent with the amounts that the dealer<\/span> charges its other retail service customers for parts used<\/span> by the dealer<\/span> to perform similar work. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

6.<\/span> In the case of service work, manufacturer<\/span> original parts or parts otherwise specified by the manufacturer<\/span> or distributor, and parts provided by a dealer either pursuant to an adjustment program as defined in § 59.1-207.34<\/a> or as otherwise requested by the manufacturer<\/span> or distributor, the dealer shall be compensated in the same manner as for recall or warranty service or parts.\n\t\t\t\tThis section does not apply to compensation for parts such as components, systems, fixtures, appliances, furnishings, accessories, and features that are designed, used<\/span>, and maintained primarily for nonvehicular, residential purposes. Recall, warranty, and sales incentive audits of dealer records may be conducted by the manufacturer<\/span>, factory branch<\/span>, distributor, or distributor branch<\/span> on a reasonable basis, and dealer claims for recall, warranty, or sales incentive compensation shall not be denied except for good cause, such as performance of nonwarranty repairs, lack of material<\/span> documentation, fraud<\/span>, or misrepresentation. A dealer’s failure to comply with the specific requirements of the manufacturer<\/span> or distributor for processing the claim shall not constitute grounds for the denial of the claim or reduction of the amount of compensation to the dealer as long as reasonable documentation or other evidence has been presented to substantiate the claim. The manufacturer<\/span>, factory branch<\/span>, distributor, or distributor branch<\/span> shall not deny a claim or reduce the amount of compensation to the dealer for recall or warranty repairs to resolve a condition discovered by the dealer during the course of a separate repair requested by the customer or to resolve a condition on the basis of advice or recommendation by the dealer. Claims for dealer compensation shall be paid within 30 days of dealer submission or within 30 days of the end of an incentive program or rejected in writing for stated reasons. The manufacturer<\/span>, factory branch<\/span>, distributor, or distributor branch<\/span> shall allow a dealer to submit a claim for rental vehicle reimbursement as required pursuant to subdivision B 5, in 30-day increments, prior to the end of the rental vehicle period if the repair for which the rental vehicle is associated is open due to a delay in parts or repair information from the manufacturer<\/span>, factory branch<\/span>, distributor, or distributor branch<\/span>. The manufacturer<\/span>, factory branch<\/span>, distributor, or distributor branch<\/span> shall reserve the right to reasonable periodic audits to determine the validity of all such paid claims for dealer compensation. Any chargebacks for recall or warranty parts or service compensation and service incentives shall only be for the six-month period immediately following the date of the claim and, in the case of chargebacks for sales compensation only, for the six-month period immediately following the date of claim. The manufacturer<\/span>, factory branch<\/span>, distributor, or distributor branch<\/span> may audit and charge back, pursuant to this paragraph, claims for rental vehicle reimbursement for the six-month period immediately following the date of payment of the claim for the warranty or recall repair associated with such rental. However, such limitations shall not be effective if a manufacturer<\/span>, factory branch<\/span>, distributor, or distributor branch<\/span> has reasonable cause<\/span> to believe that a claim submitted by a dealer is intentionally false or fraudulent. For purposes of this section, “reasonable cause<\/span>” means a bona fide belief based upon evidence that the material<\/span> issues<\/span> of fact<\/span> are such that a person of ordinary caution, prudence, and judgment<\/span> could believe that a claim was intentionally false or fraudulent. A dealer shall not be charged back or otherwise liable for sales incentives or charges related to a motor vehicle sold by the dealer to a purchaser other than a licensed, franchised motor vehicle dealer<\/span><\/span> and subsequently exported or resold, unless the manufacturer<\/span>, factory branch<\/span>, distributor, or distributor branch<\/span> can demonstrate by a preponderance of the evidence<\/span> that the dealer should have known of and did not exercise due diligence in discovering the purchaser’s intention to export or resell the motor vehicle. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

B.<\/span> It shall be unlawful for any motor vehicle manufacturer<\/span>, factory branch<\/span>, distributor, or distributor branch<\/span> to: <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

1.<\/span> Fail to perform any of its recall or warranty obligations, including tires, with respect to a motor vehicle; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

2.<\/span> Fail to assume all responsibility for any liability resulting from structural or production defects; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

3.<\/span> Fail to include in written notices of factory recalls to vehicle owners<\/span> and dealers the expected date by which necessary parts and equipment will be available to dealers for the correction of defects; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

4.<\/span> Fail to compensate any of the motor vehicle dealers<\/span> licensed in the Commonwealth for repairs effected by the dealer of merchandise damaged in manufacture or transit to the dealer where the carrier is designated by the manufacturer<\/span>, factory branch<\/span>, distributor, or distributor branch<\/span>; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

5.<\/span> Fail to fully compensate its motor vehicle dealers<\/span> licensed in the Commonwealth for recall or warranty parts, work, and service pursuant to subsection A either by reduction in the amount due to the dealer or by separate charge, surcharge, or other imposition by which the motor vehicle manufacturer<\/span>, factory branch<\/span>, distributor, or distributor branch<\/span> seeks to recover its costs of complying with subsection A, or for legal costs and expenses incurred by such dealers in connection with recall or warranty obligations for which the manufacturer<\/span>, factory branch<\/span>, distributor, or distributor branch<\/span> is legally responsible or which the manufacturer<\/span>, factory branch<\/span>, distributor, or distributor branch<\/span> imposes upon the dealer. Failure to fully reimburse a dealer for the cost to the dealer of a rental vehicle provided to a customer as required, offered, advertised as available, or agreed to by the manufacturer<\/span> or distributor shall be considered a violation of this subsection. A dealer’s inability to provide a specified type of vehicle, including line-make<\/span>, size, or category, from the rental market shall not be grounds to refuse to fully reimburse a dealer under this subdivision. Failure to provide compensation consistent with this section to a dealer for assistance requested by a customer whose vehicle was subjected to an over-the-air or remote change, repair, or update to any part, system, accessory<\/span>, or function by the vehicle manufacturer<\/span> or distributor and performed at the dealership to satisfy the customer shall be considered a violation of this subsection; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

6.<\/span> Misrepresent in any way to purchasers of motor vehicles<\/span> that warranties with respect to the manufacture, performance, or design of the vehicle are made by the dealer, either as warrantor or co-warrantor; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

7.<\/span> Require the dealer to make warranties to customers in any manner related to the manufacture, performance, or design of the vehicle; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

8.<\/span> Shift or attempt to shift to the motor vehicle dealer<\/span>, directly or indirectly, any liabilities of the manufacturer<\/span>, factory branch<\/span>, distributor or distributor branch<\/span> under the Virginia Motor Vehicle Warranty Enforcement Act (§ 59.1-207.9<\/a> et seq.), unless such liability results from the act or omission by the dealer; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

9.<\/span> Deny any dealer the right to return any part or accessory<\/span> that the dealer has not sold within 12 months where the part or accessory<\/span> was not obtained through a specific order<\/span> initiated by the dealer but instead was specified for, sold to and shipped to the dealer pursuant to an automated ordering system, provided that such part or accessory<\/span> is in the condition required for return to the manufacturer<\/span>, factory branch<\/span>, distributor, or distributor branch<\/span>, and the dealer returns the part within 30 days of it becoming eligible under this subdivision. For purposes of this subdivision, an “automated ordering system” is a computerized system that automatically specifies parts and accessories for sale and shipment to the dealer without specific order<\/span> thereof initiated by the dealer. The manufacturer<\/span>, factory branch<\/span>, distributor, or distributor branch<\/span> shall not charge a restocking or handling fee for any part or accessory<\/span> being returned under this subdivision. This subdivision shall not apply if the manufacturer<\/span>, factory branch<\/span>, distributor, or distributor branch<\/span> has available to the dealer an alternate system for ordering parts and accessories that provides for shipment of ordered parts and accessories to the dealer within the same time frame as the dealer would receive them when ordered through the automated ordering system. Notwithstanding the provisions of this subdivision, the manufacturer<\/span>, factory branch<\/span>, distributor, or distributor branch<\/span> shall not deny any dealer the right to return, within 12 months of the date of purchase, any part or accessory<\/span> needed to complete a recall or similar repair for compensation and the manufacturer<\/span>, factory branch<\/span>, distributor, or distributor branch<\/span> is prohibited from deeming such part obsolete or nonreturnable by removing it from current parts codes or catalogs; or <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

10.<\/span> When providing a new motor vehicle<\/span> to a dealer for offer or sale to the public, fail to provide to such dealer a written disclosure that may be provided to a potential buyer of the new motor vehicle<\/span> of each accessory<\/span> or function of the vehicle that may be initiated, updated, changed, or maintained by the manufacturer<\/span> or distributor through over-the-air or remote means, and the charge to the customer at the time of the new motor vehicle<\/span> sale for such initiation, update, change, or maintenance. A manufacturer<\/span> or distributor may comply with this subdivision by notifying the dealer that such information is available on a website or by other digital means. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

C.<\/span> Notwithstanding the terms of any franchise<\/span>, it shall be unlawful for any motor vehicle manufacturer<\/span>, factory branch<\/span>, distributor, or distributor branch<\/span> to fail to indemnify and hold harmless its motor vehicle dealers<\/span> against any losses or damages<\/span> arising out of complaints, claims, or suits relating to the manufacture, assembly, or design of motor vehicles<\/span>, parts, or accessories, or other functions by the manufacturer<\/span>, factory branch<\/span>, distributor, or distributor branch<\/span> beyond the control of the dealer, including, without limitation, the selection by the manufacturer<\/span>, factory branch<\/span>, distributor, or distributor branch<\/span> of parts or components for the vehicle or any damages<\/span> to merchandise occurring in transit to the dealer where the carrier is designated by the manufacturer<\/span>, factory branch<\/span>, distributor, or distributor branch<\/span>. The dealer shall notify the manufacturer<\/span> of pending suits in which allegations<\/span> are made that come within this subsection whenever reasonably practicable to do so. Every motor vehicle dealer<\/span> franchise<\/span> issued to, amended, or renewed for motor vehicle dealers<\/span> in Virginia shall be construed to incorporate provisions consistent with the requirements of this subsection. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

D.<\/span> On any new motor vehicle<\/span>, any uncorrected damage or any corrected damage exceeding three percent of the manufacturer<\/span>’s or distributor’s suggested retail price as defined in 15 U.S.C. \u00a7\u00a7 1231 -1233, as measured by retail repair costs, must be disclosed to the dealer in writing prior to delivery. Factory mechanical repair and damage to glass, tires, and bumpers are excluded from the three percent rule when properly replaced by identical manufacturer<\/span>’s or distributor’s original equipment or parts. Whenever a new motor vehicle<\/span> is damaged in transit, when the carrier or means of transportation is determined by the manufacturer<\/span> or distributor, or whenever a motor vehicle is otherwise damaged prior to delivery to the new motor vehicle dealer<\/span>, the new motor vehicle dealer<\/span> shall: <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

1.<\/span> Notify the manufacturer<\/span> or distributor of the damage within three business days from the date of delivery of the new motor vehicle<\/span> to the new motor vehicle<\/span> dealership or within the additional time specified in the franchise<\/span>; and <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

2.<\/span> Request from the manufacturer<\/span> or distributor authorization to replace the components, parts, and accessories damaged or otherwise correct the damage, unless the damage to the vehicle exceeds the three percent rule, in which case the dealer may reject the vehicle within three business days. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

E.<\/span> If the manufacturer<\/span> or distributor refuses or fails to authorize correction of such damage within 10 days after receipt of notification, or if the dealer rejects the vehicle because damage exceeds the three percent rule, ownership of the new motor vehicle<\/span> shall revert to the manufacturer<\/span> or distributor, and the new motor vehicle dealer<\/span> shall have no obligation, financial or otherwise, with respect to such motor vehicle. Should either the manufacturer<\/span>, distributor, or the dealer elect to correct the damage or any other damage exceeding the three percent rule, full disclosure shall be made by the dealer in writing to the buyer and an acknowledgement by the buyer is required. If there is less than three percent damage, no disclosure is required, provided the damage has been corrected. Predelivery mechanical work shall not require a disclosure. Failure to disclose any corrected damage within the knowledge of the selling dealer to a new motor vehicle<\/span> in excess of the three percent rule shall constitute grounds for revocation<\/span> of the buyer order<\/span>, provided that, within 30 days of purchase, the motor vehicle is returned to the dealer with an accompanying written notice of the grounds for revocation<\/span>. In case of revocation<\/span> pursuant to this section, the dealer shall accept the vehicle and refund any payments made to the dealer in connection with the transaction, less a reasonable allowance for the consumer’s use of the vehicle as defined in § 59.1-207.11<\/a>. Nothing in this section shall be construed to exempt from the provisions of this section damage to a new motor vehicle<\/span> that occurs following delivery of the vehicle to the dealer. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

F.<\/span> If there is a dispute between the manufacturer<\/span>, factory branch<\/span>, distributor, or distributor branch<\/span> and the dealer with respect to any matter referred to in subsection A, B, or C, either party<\/span> may petition<\/span> the Commissioner<\/span> in writing, within 30 days after either party<\/span> has given written notice of the dispute to the other, for a hearing<\/span>. The decision of the Commissioner<\/span> shall be binding on the parties, subject to rights of judicial review and appeal<\/span> as provided in Chapter 40 (§ 2.2-4000<\/a> et seq.) of Title 2.2. However, nothing contained in this section shall give the Commissioner<\/span> any authority as to the content or interpretation of any manufacturer<\/span>’s or distributor’s warranty. A manufacturer<\/span>, factory branch<\/span>, distributor, or distributor branch<\/span> may not collect chargebacks, fully or in part, either through direct payment or by charge to the dealer’s account, for recall or warranty parts or service compensation, including service incentives, sales incentives, other sales compensation, surcharges, fees, penalties, or any financial imposition of any type arising from an alleged failure of the dealer to comply with a policy of, directive from, or agreement with the manufacturer<\/span>, factory branch<\/span>, distributor, or distributor branch<\/span> until 40 days following final notice of the amount charged to the dealer following all internal processes of the manufacturer<\/span>, factory, factory branch<\/span>, distributor, or distributor branch<\/span>. Within 30 days following receipt of such final notice, the dealer may petition<\/span> the Commissioner<\/span>, in writing, for a hearing<\/span>. If a dealer requests such a hearing<\/span>, the manufacturer<\/span>, factory branch<\/span>, distributor, or distributor branch<\/span> may not collect the chargeback, fully or in part, either through direct payment or by charge to the dealer’s account, until the completion of the hearing<\/span> and a final decision of the Commissioner<\/span> concerning the validity of the chargeback. <\/i><\/a><\/p><\/section>","plain_text":" CODE OF VIRGINIA\n\nRECALL, WARRANTY, MAINTENANCE AND SALES INCENTIVE OBLIGATIONS (\u00a7 46.2-1571)\n\nA. Each motor vehicle manufacturer, factory branch, distributor, or distributor\nbranch shall (i) specify in writing to each of its motor vehicle dealers\nlicensed in the Commonwealth the dealer’s obligations for preparation,\ndelivery, recall, and warranty service on its products and (ii) compensate the\ndealer for recall or warranty parts, service, and diagnostic work required of\nthe dealer by the manufacturer or distributor as follows:\n\n 1. Compensation of a dealer for recall or warranty parts, service, and\n diagnostic work shall not be less than the amounts charged by the dealer for\n the manufacturer’s or distributor’s original parts, service, and\n diagnostic work to retail customers for nonwarranty service, parts, and\n diagnostic work installed or performed in the dealer’s service\n department. All manufacturer or distributor compensated parts, service,\n diagnostic work, updates to a vehicle accessory or function, or initialization\n or repair of a vehicle part, system, accessory, or function performed by the\n dealer shall be subject to this subsection. Diagnostic work shall include all\n time spent by a technician who meets the manufacturer’s or\n distributor’s qualifications and requirements for the repair work\n communicating with the manufacturer’s technical assistance or external\n manufacturer source in order to complete a warranty repair. Recall or warranty\n parts compensation shall be stated as a percentage of markup, which shall be\n an agreed reasonable approximation of retail markup and which shall be\n uniformly applied to all of the manufacturer’s or distributor’s\n parts unless otherwise provided for in this section. If the dealer and\n manufacturer or distributor cannot agree on the recall or warranty parts\n compensation markup to be paid to the dealer, the markup shall be determined\n by an average of the dealer’s retail markup on all of the\n manufacturer’s or distributor’s parts as described in subdivisions\n 2 and 3.\n\n 2. For purposes of determining recall or warranty parts and service\n compensation paid to a dealer by the manufacturer or distributor, including\n body-shop repairs, only retail repair orders, or the retail portion of repair\n orders containing retail and non-retail operations, shall be considered. For\n the purposes of this section, “retail” does not include\n menu-priced parts or services, services and parts used in internal repairs\n paid by the dealer, group discounts, special event discounts, special event\n promotions, and insurance-paid repairs.\n\n 3. Increases in dealer recall or warranty parts and service compensation and\n diagnostic work compensation, pursuant to this section, shall be requested by\n the dealer in writing, shall be based on 100 consecutive repair orders or all\n repair orders over a 90-day period, whichever occurs first. If any portion of\n a retail repair order includes amounts that are not retail, such portion shall\n be excluded. Compensation for parts shall be stated as a percentage of markup\n that shall be uniformly applied to all the manufacturer’s or\n distributor’s parts. Compensation for parts used in a recall or similar\n repair, not including warranty repairs, shall be based on the highest price of\n such parts in the 12 months before the recall or similar repair is announced\n to dealers. If the manufacturer or distributor changes the parts number or\n similar designation of a part, the price of such part established pursuant to\n this subdivision shall be determined by the price of such part before such\n change.\n\n 4. In the case of recall or warranty parts compensation, the provisions of\n this subsection shall be effective only for model year 1992 and succeeding\n model years.\n\n 5. If a manufacturer or distributor furnishes a part to a dealer at no cost\n for use by the dealer in performing work for which the manufacturer or\n distributor is required to compensate the dealer under this section, the\n manufacturer or distributor shall compensate the dealer for the part in the\n same manner as recall or warranty parts compensation, less the wholesale\n costs, for such part as listed in the manufacturer’s current price\n schedules. A manufacturer or distributor may pay the dealer a reasonable\n handling fee instead of the compensation otherwise required by this subsection\n for special high-performance complete engine assemblies in limited production\n motor vehicles that constitute less than five percent of model production\n furnished to the dealer at no cost, if the manufacturer or distributor\n excludes such special high-performance complete engine assemblies in\n determining whether the amounts requested by the dealer for recall or warranty\n compensation are consistent with the amounts that the dealer charges its other\n retail service customers for parts used by the dealer to perform similar work.\n\n 6. In the case of service work, manufacturer original parts or parts otherwise\n specified by the manufacturer or distributor, and parts provided by a dealer\n either pursuant to an adjustment program as defined in § 59.1-207.34 or\n as otherwise requested by the manufacturer or distributor, the dealer shall be\n compensated in the same manner as for recall or warranty service or parts.\n \t\t\t\tThis section does not apply to compensation for parts such as components,\n systems, fixtures, appliances, furnishings, accessories, and features that are\n designed, used, and maintained primarily for nonvehicular, residential\n purposes. Recall, warranty, and sales incentive audits of dealer records may\n be conducted by the manufacturer, factory branch, distributor, or distributor\n branch on a reasonable basis, and dealer claims for recall, warranty, or sales\n incentive compensation shall not be denied except for good cause, such as\n performance of nonwarranty repairs, lack of material documentation, fraud, or\n misrepresentation. A dealer’s failure to comply with the specific\n requirements of the manufacturer or distributor for processing the claim shall\n not constitute grounds for the denial of the claim or reduction of the amount\n of compensation to the dealer as long as reasonable documentation or other\n evidence has been presented to substantiate the claim. The manufacturer,\n factory branch, distributor, or distributor branch shall not deny a claim or\n reduce the amount of compensation to the dealer for recall or warranty repairs\n to resolve a condition discovered by the dealer during the course of a\n separate repair requested by the customer or to resolve a condition on the\n basis of advice or recommendation by the dealer. Claims for dealer\n compensation shall be paid within 30 days of dealer submission or within 30\n days of the end of an incentive program or rejected in writing for stated\n reasons. The manufacturer, factory branch, distributor, or distributor branch\n shall allow a dealer to submit a claim for rental vehicle reimbursement as\n required pursuant to subdivision B 5, in 30-day increments, prior to the end\n of the rental vehicle period if the repair for which the rental vehicle is\n associated is open due to a delay in parts or repair information from the\n manufacturer, factory branch, distributor, or distributor branch. The\n manufacturer, factory branch, distributor, or distributor branch shall reserve\n the right to reasonable periodic audits to determine the validity of all such\n paid claims for dealer compensation. Any chargebacks for recall or warranty\n parts or service compensation and service incentives shall only be for the\n six-month period immediately following the date of the claim and, in the case\n of chargebacks for sales compensation only, for the six-month period\n immediately following the date of claim. The manufacturer, factory branch,\n distributor, or distributor branch may audit and charge back, pursuant to this\n paragraph, claims for rental vehicle reimbursement for the six-month period\n immediately following the date of payment of the claim for the warranty or\n recall repair associated with such rental. However, such limitations shall not\n be effective if a manufacturer, factory branch, distributor, or distributor\n branch has reasonable cause to believe that a claim submitted by a dealer is\n intentionally false or fraudulent. For purposes of this section,\n “reasonable cause” means a bona fide belief based upon evidence\n that the material issues of fact are such that a person of ordinary caution,\n prudence, and judgment could believe that a claim was intentionally false or\n fraudulent. A dealer shall not be charged back or otherwise liable for sales\n incentives or charges related to a motor vehicle sold by the dealer to a\n purchaser other than a licensed, franchised motor vehicle dealer and\n subsequently exported or resold, unless the manufacturer, factory branch,\n distributor, or distributor branch can demonstrate by a preponderance of the\n evidence that the dealer should have known of and did not exercise due\n diligence in discovering the purchaser’s intention to export or resell\n the motor vehicle.\n\nB. It shall be unlawful for any motor vehicle manufacturer, factory branch,\ndistributor, or distributor branch to:\n\n 1. Fail to perform any of its recall or warranty obligations, including tires,\n with respect to a motor vehicle;\n\n 2. Fail to assume all responsibility for any liability resulting from\n structural or production defects;\n\n 3. Fail to include in written notices of factory recalls to vehicle owners and\n dealers the expected date by which necessary parts and equipment will be\n available to dealers for the correction of defects;\n\n 4. Fail to compensate any of the motor vehicle dealers licensed in the\n Commonwealth for repairs effected by the dealer of merchandise damaged in\n manufacture or transit to the dealer where the carrier is designated by the\n manufacturer, factory branch, distributor, or distributor branch;\n\n 5. Fail to fully compensate its motor vehicle dealers licensed in the\n Commonwealth for recall or warranty parts, work, and service pursuant to\n subsection A either by reduction in the amount due to the dealer or by\n separate charge, surcharge, or other imposition by which the motor vehicle\n manufacturer, factory branch, distributor, or distributor branch seeks to\n recover its costs of complying with subsection A, or for legal costs and\n expenses incurred by such dealers in connection with recall or warranty\n obligations for which the manufacturer, factory branch, distributor, or\n distributor branch is legally responsible or which the manufacturer, factory\n branch, distributor, or distributor branch imposes upon the dealer. Failure to\n fully reimburse a dealer for the cost to the dealer of a rental vehicle\n provided to a customer as required, offered, advertised as available, or\n agreed to by the manufacturer or distributor shall be considered a violation\n of this subsection. A dealer’s inability to provide a specified type of\n vehicle, including line-make, size, or category, from the rental market shall\n not be grounds to refuse to fully reimburse a dealer under this subdivision.\n Failure to provide compensation consistent with this section to a dealer for\n assistance requested by a customer whose vehicle was subjected to an\n over-the-air or remote change, repair, or update to any part, system,\n accessory, or function by the vehicle manufacturer or distributor and\n performed at the dealership to satisfy the customer shall be considered a\n violation of this subsection;\n\n 6. Misrepresent in any way to purchasers of motor vehicles that warranties\n with respect to the manufacture, performance, or design of the vehicle are\n made by the dealer, either as warrantor or co-warrantor;\n\n 7. Require the dealer to make warranties to customers in any manner related to\n the manufacture, performance, or design of the vehicle;\n\n 8. Shift or attempt to shift to the motor vehicle dealer, directly or\n indirectly, any liabilities of the manufacturer, factory branch, distributor\n or distributor branch under the Virginia Motor Vehicle Warranty Enforcement\n Act (§ 59.1-207.9 et seq.), unless such liability results from the act or\n omission by the dealer;\n\n 9. Deny any dealer the right to return any part or accessory that the dealer\n has not sold within 12 months where the part or accessory was not obtained\n through a specific order initiated by the dealer but instead was specified\n for, sold to and shipped to the dealer pursuant to an automated ordering\n system, provided that such part or accessory is in the condition required for\n return to the manufacturer, factory branch, distributor, or distributor\n branch, and the dealer returns the part within 30 days of it becoming eligible\n under this subdivision. For purposes of this subdivision, an “automated\n ordering system” is a computerized system that automatically specifies\n parts and accessories for sale and shipment to the dealer without specific\n order thereof initiated by the dealer. The manufacturer, factory branch,\n distributor, or distributor branch shall not charge a restocking or handling\n fee for any part or accessory being returned under this subdivision. This\n subdivision shall not apply if the manufacturer, factory branch, distributor,\n or distributor branch has available to the dealer an alternate system for\n ordering parts and accessories that provides for shipment of ordered parts and\n accessories to the dealer within the same time frame as the dealer would\n receive them when ordered through the automated ordering system.\n Notwithstanding the provisions of this subdivision, the manufacturer, factory\n branch, distributor, or distributor branch shall not deny any dealer the right\n to return, within 12 months of the date of purchase, any part or accessory\n needed to complete a recall or similar repair for compensation and the\n manufacturer, factory branch, distributor, or distributor branch is prohibited\n from deeming such part obsolete or nonreturnable by removing it from current\n parts codes or catalogs; or\n\n 10. When providing a new motor vehicle to a dealer for offer or sale to the\n public, fail to provide to such dealer a written disclosure that may be\n provided to a potential buyer of the new motor vehicle of each accessory or\n function of the vehicle that may be initiated, updated, changed, or maintained\n by the manufacturer or distributor through over-the-air or remote means, and\n the charge to the customer at the time of the new motor vehicle sale for such\n initiation, update, change, or maintenance. A manufacturer or distributor may\n comply with this subdivision by notifying the dealer that such information is\n available on a website or by other digital means.\n\nC. Notwithstanding the terms of any franchise, it shall be unlawful for any\nmotor vehicle manufacturer, factory branch, distributor, or distributor branch\nto fail to indemnify and hold harmless its motor vehicle dealers against any\nlosses or damages arising out of complaints, claims, or suits relating to the\nmanufacture, assembly, or design of motor vehicles, parts, or accessories, or\nother functions by the manufacturer, factory branch, distributor, or distributor\nbranch beyond the control of the dealer, including, without limitation, the\nselection by the manufacturer, factory branch, distributor, or distributor\nbranch of parts or components for the vehicle or any damages to merchandise\noccurring in transit to the dealer where the carrier is designated by the\nmanufacturer, factory branch, distributor, or distributor branch. The dealer\nshall notify the manufacturer of pending suits in which allegations are made\nthat come within this subsection whenever reasonably practicable to do so. Every\nmotor vehicle dealer franchise issued to, amended, or renewed for motor vehicle\ndealers in Virginia shall be construed to incorporate provisions consistent with\nthe requirements of this subsection.\n\nD. On any new motor vehicle, any uncorrected damage or any corrected damage\nexceeding three percent of the manufacturer’s or distributor’s\nsuggested retail price as defined in 15 U.S.C. \u00a7\u00a7 1231 -1233, as measured by\nretail repair costs, must be disclosed to the dealer in writing prior to\ndelivery. Factory mechanical repair and damage to glass, tires, and bumpers are\nexcluded from the three percent rule when properly replaced by identical\nmanufacturer’s or distributor’s original equipment or parts.\nWhenever a new motor vehicle is damaged in transit, when the carrier or means of\ntransportation is determined by the manufacturer or distributor, or whenever a\nmotor vehicle is otherwise damaged prior to delivery to the new motor vehicle\ndealer, the new motor vehicle dealer shall:\n\n 1. Notify the manufacturer or distributor of the damage within three business\n days from the date of delivery of the new motor vehicle to the new motor\n vehicle dealership or within the additional time specified in the franchise;\n and\n\n 2. Request from the manufacturer or distributor authorization to replace the\n components, parts, and accessories damaged or otherwise correct the damage,\n unless the damage to the vehicle exceeds the three percent rule, in which case\n the dealer may reject the vehicle within three business days.\n\nE. If the manufacturer or distributor refuses or fails to authorize correction\nof such damage within 10 days after receipt of notification, or if the dealer\nrejects the vehicle because damage exceeds the three percent rule, ownership of\nthe new motor vehicle shall revert to the manufacturer or distributor, and the\nnew motor vehicle dealer shall have no obligation, financial or otherwise, with\nrespect to such motor vehicle. Should either the manufacturer, distributor, or\nthe dealer elect to correct the damage or any other damage exceeding the three\npercent rule, full disclosure shall be made by the dealer in writing to the\nbuyer and an acknowledgement by the buyer is required. If there is less than\nthree percent damage, no disclosure is required, provided the damage has been\ncorrected. Predelivery mechanical work shall not require a disclosure. Failure\nto disclose any corrected damage within the knowledge of the selling dealer to a\nnew motor vehicle in excess of the three percent rule shall constitute grounds\nfor revocation of the buyer order, provided that, within 30 days of purchase,\nthe motor vehicle is returned to the dealer with an accompanying written notice\nof the grounds for revocation. In case of revocation pursuant to this section,\nthe dealer shall accept the vehicle and refund any payments made to the dealer\nin connection with the transaction, less a reasonable allowance for the\nconsumer’s use of the vehicle as defined in § 59.1-207.11. Nothing in\nthis section shall be construed to exempt from the provisions of this section\ndamage to a new motor vehicle that occurs following delivery of the vehicle to\nthe dealer.\n\nF. If there is a dispute between the manufacturer, factory branch, distributor,\nor distributor branch and the dealer with respect to any matter referred to in\nsubsection A, B, or C, either party may petition the Commissioner in writing,\nwithin 30 days after either party has given written notice of the dispute to the\nother, for a hearing. The decision of the Commissioner shall be binding on the\nparties, subject to rights of judicial review and appeal as provided in Chapter\n40 (§ 2.2-4000 et seq.) of Title 2.2. However, nothing contained in this\nsection shall give the Commissioner any authority as to the content or\ninterpretation of any manufacturer’s or distributor’s warranty. A\nmanufacturer, factory branch, distributor, or distributor branch may not collect\nchargebacks, fully or in part, either through direct payment or by charge to the\ndealer’s account, for recall or warranty parts or service compensation,\nincluding service incentives, sales incentives, other sales compensation,\nsurcharges, fees, penalties, or any financial imposition of any type arising\nfrom an alleged failure of the dealer to comply with a policy of, directive\nfrom, or agreement with the manufacturer, factory branch, distributor, or\ndistributor branch until 40 days following final notice of the amount charged to\nthe dealer following all internal processes of the manufacturer, factory,\nfactory branch, distributor, or distributor branch. Within 30 days following\nreceipt of such final notice, the dealer may petition the Commissioner, in\nwriting, for a hearing. If a dealer requests such a hearing, the manufacturer,\nfactory branch, distributor, or distributor branch may not collect the\nchargeback, fully or in part, either through direct payment or by charge to the\ndealer’s account, until the completion of the hearing and a final decision\nof the Commissioner concerning the validity of the chargeback.\n\nHISTORY: 1988, c. 865, \u00a7 46.1-550.5:30; 1989, cc. 365, 727; 1990, c. 250; 1991,\nc. 92; 1992, c. 135; 1993, c. 90; 1994, c. 783; 1995, cc. 421, 477; 1997, c.\n484; 1998, c. 681; 2001, cc. 80, 89; 2006, cc. 809, 818; 2007, c. 830; 2009, cc.\n173, 176; 2010, cc. 284, 318; 2013, cc. 260, 630; 2016, cc. 432, 534; 2022, cc.\n715, 752; 2023, cc. 310, 311; 2025, cc. 546, 558.","edition":{"id":1,"name":"2025","slug":"2025","date_created":"2026-06-21 22:39:22","date_modified":"2026-06-21 22:39:22","current":1,"order_by":1,"last_import":null}}