H403 - Clarify Motor Vehicle Franchise Laws. (SL 2021-147)
Session Year 2021
Overview: S.L. 2021-147 makes the following changes to North Carolina's Motor Vehicle Dealers and Manufacturers Licensing Law:

  • Prohibits conditioning approval of dealership transfers on dealer's willingness to renovate, relocate, or enter into a right of first refusal.
  • Clarifies provisions regulating franchise agreements and changes to established plans and to facilitate dealers' ability to sell electric vehicles.
  • Prohibits manufacturers from requiring dealers to purchase pre-owned vehicles.
  • Requires manufacturer to buy a dealer's existing facility if it does not sell if the manufacturer or distributor required the dealer to relocate.
  • Extends existing grandfather provisions allowing certain manufacturer incentive programs.
  • Requires information be provided to dealers regarding how vehicle allocations are made by manufacturers.
  • Clarifies provisions regarding reimbursement to dealers who provide loaner vehicles to customers having vehicles serviced when required by the manufacturer.
  • Provides that certain dealer facility improvements required by a manufacturer in the 10 years preceding an incentive program comply with program requirements; addresses programs that are discontinued or revised.
  • Makes clarifying changes to existing law regarding warranty obligations.
  • Clarifies the definition of motor vehicle dealer includes one who leases vehicles or offers new vehicles as part of a subscription program.
  • Prohibits manufacturers from requiring dealers to provide financial statements specific to a franchise or line-make if the dealer operates more than one franchise or sells more than one line-make.
  • Creates a framework for online vehicle reservations or requests to purchase or lease.
  • Allows electronic signatures on various documents for manufacturer vehicle loaner programs.
  • Clarifies vehicle inspection requirements for transfer of vehicles between affiliated dealerships.
  • Clarifies delivery and execution of prepared documents at a customer's home or place of business do not violate the requirement conducting motor vehicle sales at an established salesroom.

Provisions related to dealer and manufacturer partnerships for online sales became effective January 1, 2022. The remainder of the act became effective September 10, 2021.

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