Are You Entitled to Money from Your Manufacturer for Warranty Repairs?

By Hilary Holmes Rheaume

The New Hampshire Dealer Bill of Rights (R.S.A. 357-C) sets rules for how manufacturers, distributors, and dealerships do business together. One important part of this law regulates a manufacturer’s warranty obligations. For example, a manufacturer that requires a dealer to perform “warranty service” must reimburse the dealer for such “warranty service.”

Additionally, a manufacturer is required to reimburse a dealership for parts used in warranty repairs. However, there is an often overlooked provision in R.S.A. 357-C:5 known as the “Black Box Parts” provision:

If a motor vehicle franchisor or component manufacturer supplies a part or parts for use in a repair rendered under a warranty other than by sale of that part or parts to the motor vehicle franchisee, the motor vehicle franchisee shall be entitled to compensation equivalent to the motor vehicle franchisee’s average percentage markup on the part or parts, as if the part or parts had been sold to the motor vehicle franchisee by the motor vehicle franchisor.

In other words, a manufacturer cannot force a dealership, in connection with a warranty repair, to accept delivery of a part, perform the repair, and ship the old part back to the manufacturer without providing any compensation for the part to the dealership. Rather, the manufacturer must provide at least “compensation equivalent to the motor vehicle franchisee’s average percentage markup on the part or parts, as if the part or parts had been sold to the motor vehicle franchisee by the motor vehicle franchisor.” To note, the Black Box Parts provision doesn’t apply to big items like entire engines, transmissions, in-floor heating systems, rear-drive axles, household appliances, furnishings, and generators of a motor home.

To the extent your dealership has been asked to simply accept delivery of a part for a warranty repair, perform the warranty repair, and ship the used part back to the manufacturer without any compensation, then you should speak with your manufacturer representative and/or follow your manufacturer’s internal warranty policies to request a reimbursement for such parts as soon as possible. Otherwise, you could continue to lose valuable compensation that you are legally entitled to under the New Hampshire Dealer Bill of Rights.