• To stay safe on the road and protect the value of their cars, Maryland drivers need full access to safety and defect information about their vehicles. They also need their dealers to do the repair work their cars need – on time and under warranty.
• To share all they know about the cars they sell and put their customers’ needs before the demands of the factory, MD dealers need clearer protections against being punished for disclosing information and relief from the financial pressures of punitive audits.
The Better Access to Safety Data and Car Repairs Act (SB566) takes three important steps to make those goals a reality for Maryland drivers and dealers. It will:
1. Clearly prohibit retaliation for safety and defect disclosures: Last year Maryland passed important legislation that prohibits car manufacturers from taking “adverse action” against dealers that share information about secret warranties and safety defects they get from the carmakers. That is an important advance. Unfortunately, language that offered real protection by spelling out just what manufacturers CANNOT do to dealers got stripped from the bill. To give our new disclosure law the teeth it needs to enable dealers to freely share important information, this bill amends the law to make clear that the carmakers cannot punish dealers for sharing information by:
• Denying any benefit to a dealer that the dealer would otherwise receive.
• Blocking access to benefits like sales incentives that consumers get through their dealers.
• Threatening to or adding a dealership in an area already assigned to a dealer without adequate business justification.
2. Limit audit times for warranty and incentive work to 90 days: Maryland allows carmakers to audit dealers for nine months after warranty work and six months on incentive offers. Even medical insurance companies are limited to 30 days. Manufacturers don’t really need that much time to check for trends in this electronic age, but manufacturers like the power those long audit times can give them. For drivers and dealers, however, those audits are a real problem. Even a smaller dealer can have hundreds of thousands – even millions – of dollars at risk in audits that go back that long. That gives a dealer strong incentive to keep warranty repair expenses costs low to please the factory and avoid a punitive audit. This reform will ease that audit pressure – and make it easier for Maryland drivers to get their cars fixed, right away and under warranty. But there will still be no limit on charging a dealer back if there’s actual fraud.
3. Stop the unfairness of using clerical errors to deny payment for legitimate warranty work: When manufacturers conduct audits, they often use trivial clerical errors on repair forms to justify refusing to reimburse dealers for work everyone agrees was done to fix real problems in customers’ cars. In 2009, the legislature passed a law meant to make sure dealers can’t be punished for such errors on repair work. This bill will restore the clerical error protections of the 2009 language – so dealers can do the work drivers need without fear of financial retribution for clerical errors.