PIERRE, SD. - South Dakota lawmakers are considering a new bill, Senate Bill 167, which seeks to revise vehicle dealer warranty compensation provisions. The bill, introduced by Senator Tobin, underscores new language in the current legislation to ensure that manufacturers compensate vehicle dealers when they issue a campaign, recall, service program, stop-sale order, or any other program to address a defect or safety concern.
The proposed legislation aims to prevent manufacturers from avoiding their responsibility to compensate vehicle dealers when addressing a defect or safety concern by altering or removing the price, name, or number of any vehicle part or providing a vehicle part at no cost. The bill also prohibits manufacturers from imposing any cost recovery fee or surcharge on vehicle dealers while addressing a defect or safety concern.
The South Dakota Automobile Dealers Association (SDADA) supports the proposed legislation, stating that it would protect the interests of local dealerships and consumers. The association's executive director, Jim Larimer, argues that
the bill is needed to ensure that manufacturers take responsibility for the defects and safety concerns they create, rather than passing the cost onto the dealerships and consumers."
According to a recent study by J.D. Power, the average new car has 133 problems per 100 vehicles in the first 90 days of ownership. This indicates a growing need for manufacturers to take responsibility for their products' defects and safety concerns.
Similar legislation has been proposed in other states, including California and Ohio, where dealerships have argued that manufacturers have attempted to avoid compensation using tactics such as cost recovery fees and surcharges. The proposed South Dakota bill seeks to prevent such practices in the state.
However, some manufacturers have opposed the bill, arguing that it would impose additional costs on them and ultimately be passed on to the consumers. Some have also claimed that the proposed legislation would discourage them from promptly addressing defects and safety concerns, which could lead to potential consumer harm.
The South Dakota Legislature is currently reviewing the bill, and it remains to be seen whether it will be passed into law. If it is, it will take effect immediately after approval by the Governor.
In summary, the proposed legislation seeks to ensure that manufacturers take responsibility for defects and safety concerns in their products and do not evade compensation by passing the cost onto the dealerships and consumers. While the bill has received support from dealerships and consumer advocacy groups, some manufacturers have opposed it, citing additional costs and potential delays in addressing defects and safety concerns. Ultimately, it will be up to the South Dakota Legislature to decide whether the bill becomes law.
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