New changes to Ohio's dealership franchise law represent the latest round in a long-running fight over payment for warranty work -- a sore spot in dealer-factory relations for decades.
A law that took effect in Ohio last September adds specific rules to a mandate that automakers reimburse dealers for warranty-related parts and labor at the same rates the dealerships charge for retail repair work. In all, 40 states have laws that mandate such parity in reimbursement.
Automakers traditionally have limited the parts markup that dealers can charge on warranty work to 40 percent. That's significantly less than typical dealership markups on customer-paid repairs, which range from about 60 to 80 percent, dealer advocates say.
Dealers should be allowed to charge the going rate for their products and services, says Robert Robertazzi, a retired Lincoln-Mercury dealer in New Jersey. In a landmark case in the early 1990s, Robertazzi successfully sued Ford Motor Co. over retail reimbursement.
"The factory should be a paying customer, just like anybody else," Robertazzi told Fixed Ops Journal.