New Jersey § 56:10-15

§ 56:10-15.

If any motor vehicle franchise shall require or permit motor vehicle franchisees to

perform services or provide parts in satisfaction of a warranty issued by the motor

vehicle franchisor: a. The motor vehicle franchisor shall reimburse each motor vehicle franchisee for

such services as are rendered and for such parts as are supplied, in an amount equal

to the prevailing retail price charged by such motor vehicle franchisee for such services

and parts in circumstances where such services are rendered or such parts supplied

other than pursuant to warranty; provided that such motor vehicle franchisee's prevailing

retail price is not unreasonable when compared with that of the holders of motor vehicle

franchises from the same motor vehicle franchisor for identical merchandise or services

in the geographic area in which the motor vehicle franchisee is engaged in business. b. The motor vehicle franchisor shall not by agreement, by restrictions upon reimbursement,

or otherwise, restrict the nature and extent of services to be rendered or parts to

be provided so that such restriction prevents the motor vehicle franchisee from satisfying

the warranty by rendering services in a good and workmanlike manner and providing

parts which are required in accordance with generally accepted standards. Any such restriction shall constitute a prohibited practice hereunder. c. The motor vehicle franchisor shall reimburse the motor vehicle franchisee pursuant

to subsection a. of this section, without deduction, for services performed on, and

parts supplied for, a motor vehicle by the motor vehicle franchisee in good faith

and in accordance with generally accepted standards, notwithstanding any requirement

that the motor vehicle franchisor accept the return of the motor vehicle or make payment

to a consumer with respect to the motor vehicle pursuant to the provisions of P.L.1988, c. 123 ( C.56:12-29 et seq. ). d. For the purposes of this section, the “ prevailing retail price ” charged by : (1) a motor vehicle franchisee for parts means the price paid by the motor vehicle franchisee

for those parts, including all shipping and other charges, multiplied by the sum of

1.0 and the franchisee's average percentage markup over the price paid by the motor

vehicle franchisee for parts purchased by the motor vehicle franchisee from the motor

vehicle franchisor and sold at retail. The motor vehicle franchisee may establish average percentage markup under this

section by submitting to the motor vehicle franchisor 100 sequential customer paid

service repair orders or 90 days of customer paid service repair orders, whichever

is less, covering repairs made no more than 180 days before the submission, and declaring

what the average percentage markup is. The average percentage markup so declared shall go into effect 30 days following

the declaration subject to audit of the submitted repair orders by the motor vehicle

franchisor and adjustment of the average percentage markup based on that audit. Only retail sales not involving warranty repairs, parts covered by subsection e.

of this section, or parts supplied for routine vehicle maintenance, shall be considered

in calculating average percentage markup. No motor vehicle franchisor shall require a motor vehicle franchisee to establish

average percentage markup by a methodology, or by requiring information, that is unduly

burdensome or time consuming to provide, including, but not limited to, part by part

or transaction by transaction calculations. A motor vehicle franchisee shall not request a change in the average percentage

markup more than twice in one calendar year ; and (2) a recreational motor vehicle franchisee for parts means actual wholesale

cost, plus a minimum 30% handling charge and any freight costs incurred to return

the removed parts to the motor vehicle franchisor . e. If a motor vehicle franchisor 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. The requirements of this section shall not apply to entire engine assemblies and

entire transmission assemblies. In the case of those assemblies, the motor vehicle franchisor shall reimburse the

motor vehicle franchisee in the amount of 30% of what the motor vehicle franchisee

would have paid the motor vehicle franchisor for the assembly if the assembly had

not been supplied by the franchisor other than by the sale of that assembly to the

motor vehicle franchisee. f. The motor vehicle franchisor shall reimburse the motor vehicle franchisee for parts

supplied and services rendered under a warranty within 30 days after approval of a

claim for reimbursement. All claims for reimbursement shall be approved or disapproved within 30 days after

receipt of the claim by the motor vehicle franchisor. When a claim is disapproved, the motor vehicle franchisee shall be notified in writing

of the grounds for the disapproval. No claim that has been approved and paid shall be charged back to the motor vehicle

franchisee unless it can be shown that the claim was false or fraudulent, that the

services were not properly performed, that the parts or services were unnecessary

to correct the defective condition, or that the motor vehicle franchisee failed to

reasonably substantiate the claim in accordance with reasonable written requirements

of the motor vehicle franchisor, provided that the motor vehicle franchisee had been

notified of the requirements prior to the time the claim arose and the requirements

were in effect at the time the claim arose. A motor vehicle franchisor shall not audit a claim after the expiration of 12 months following the payment of the claim unless the motor vehicle franchisor has reasonable

grounds to believe that the claim was fraudulent. g. The obligations imposed on motor vehicle franchisors by this section shall apply

to any parent, subsidiary, affiliate or agent of the motor vehicle franchisor, any

person under common ownership or control, any employee of the motor vehicle franchisor

and any person holding 1% or more of the shares of any class of securities or other

ownership interest in the motor vehicle franchisor, if a warranty or service or repair

plan is issued by that person instead of or in addition to one issued by the motor

vehicle franchisor. h. The provisions of this section shall also apply to franchisor administered service

and repair plans: (1) if the motor vehicle franchisee offers for sale only the franchisor administered

service or repair plan; or (2) if the motor vehicle franchisee is paid its prevailing retail price for all service

or repair plans the motor vehicle franchisee offers for sale to purchasers of new

motor vehicles; or (3) for the first 36,000 miles of coverage under the franchisor administered service

or repair plan, if the warranty offered by the motor vehicle franchisor on the motor

vehicle provides coverage for less than 36,000 miles; or (4) for motor vehicles covered by a franchisor administered service or repair plan,

if the motor vehicle franchisee does not offer for sale the franchisor administered

service or repair plan. With respect to franchisor administered service or repair plans covering only routine

maintenance service, this section applies only to those plans sold to customers on

or after the effective date of P.L.1999, c. 45 . i. A motor vehicle franchisor shall make payment to a motor vehicle franchisee pursuant

to incentive, bonus, sales, performance or other programs within 30 days after receipt

of a claim from the motor vehicle franchisee. When a claim is disapproved, the motor vehicle franchisee shall be notified in writing

of the grounds for disapproval. No claim shall be disapproved unless it can be shown that the claim was false or

fraudulent, or that the motor vehicle franchisee failed to reasonably substantiate

the claim in accordance with reasonable written requirements of the motor vehicle

franchisor, provided that the motor vehicle franchisee had been notified of the requirements

prior to the time the claim arose and the requirements were in effect at the time

the claim arose. A motor vehicle franchisor shall not audit a claim after the expiration of 12 months

following the payment of the claim.