California’s Warranty Reimbursement at Retail Legislation

AB 179, California’s warranty reimbursement at retail legislation, was approved by the Governor on October 12, 2019. The approval of the legislation marks the end of a several year journey in which warranty reimbursement at retail legislation was being considered in California. AB 179’s passage brings California in line with the vast majority of states that have warranty reimbursement at retail statutes on the books. This article provides a summary of the highlights of the legislation.

• The legislation is effective as of January 1, 2020, which means that is when a dealer has a right to make a request for retail reimbursement pursuant to the new law.
• The legislation provides the retail reimbursement right for both parts and labor reimbursement.
• The dealer has the choice as to whether it makes a request for retail reimbursement for parts, labor or both.
• The legislation provides a detailed process to establish the retail reimbursement rate.
• The legislation prohibits imposing a surcharge, or taking any other adverse action, against a dealer that makes a request for retail reimbursement.
• The legislation applies to warranty repairs, including recalls.
• The legislation is not self-effectuating, meaning that a dealer should make a request for retail reimbursement by establishing its retail rate.

The dealer has a right to make a request to establish, or change, its retail rate once per calendar year.