S384 - Clarify Motor Vehicle Dealer Laws. (SL 2019-125)

Overview: S.L. 2019-125 makes the following changes to North Carolina's Motor Vehicle Dealers and Manufacturers Licensing Law:

• Defines special or essential tool and allows small dealers to enter into tool loaner agreements with other line-make dealers rather than purchasing them.
• Allows a dealer to request elimination of portions of the dealer's area of responsibility.
• Prohibits a manufacturer from using unfair performance data to decide proposed dealership ownership transfers or the appointment of successors.
• Makes it unlawful for a manufacturer to prohibit a dealer from selling parts or accessories online.
• Limits frequency of audits for warranty or recall parts, incentive compensation, or for sales or leases made to known exporters, unless for cause, and prohibits a manufacturer from employing an auditor whose compensation is based on the number of chargebacks resulting from the audit.
• Makes changes to strengthen existing law protecting dealership data.
• Makes changes to existing law giving dealer associations standing to bring an action for injury to the collective interest of its members, including by clarifying and expanding the circumstances under which an association may intervene or bring an action.
• Increases the amount of reimbursement paid to truck dealers by manufacturers when they sell trucks directly to nondealer retailers from $900 to $1500 per vehicle.
• Makes clarifying changes to the unfair methods of competition statute and amends the exceptions to the prohibition to allow up to six licensed dealerships in the State operated by a manufacturer of electric vehicles under specified conditions.
• Requires dealer license applicants to certify whether they are manufacturers and, if so, under which exception to the unfair methods of competition prohibition they claim to qualify for a license, and requires published notice of a license application by a manufacturer who has not been previously licensed.

This act became effective July 19, 2019, except for the provision pertaining to dealership data, which becomes effective October 1, 2020.