GMês recent policy about dealers using non-GM parts and non-GM service contracts gets dealersê attention
(Reprinted from WANADA Special Bulletin to GM dealers earlier this week)
A fair amount of concern has been expressed across the country in recent weeks regarding communications from General Motors to its dealers about repairs and maintenance being performed on GM vehicles for customers by dealers utilizing non-GM parts and non-GM service contracts. While acknowledging the GM dealerês right to use non-GM parts and non-GM service contracts with customers, the automaker nonetheless has prescribed a stringent disclosure regime that it insists its franchisees implement when non-GM parts and non-GM service contracts are utilized. These disclosures have been found by many, including NADA, to be overstated and beyond the terms of the GM Dealer Sales and Service Agreement when they present such things as the risk of unsuccessful repairs and maintenance to the customerês vehicle when the servicing dealer uses non-GM parts and non-GM service contracts. In addition, the sanctions GM says it will impose on its dealers for failing to implement the disclosures when non-GM parts are used has been found by many to be heavy handed, if not illegal.
Besides NADA, any number of state dealer associations across the country has taken exception to GMês approach here, including MADA and VADA, both of which have written GM about the likely violations of Maryland and Virginia law. Despite the registered dealer protests, GM appears to be steadfast in its non-GM parts and non-GM service contract policies with franchisees.
What follows are things GM dealers should consider with these new policies:
1. If you use GM parts and GM service contracts on maintenance and repairs, itês business as usual and no issue.
2. If there are circumstances in the future where you will not be using GM parts for maintenance and repairs, and you believe you can live with the automakerês new disclosure format, go for it and see how it works.
3. If you will be using non-GM parts and non-GM service contracts on customer vehicle maintenance and repairs and would like a modified customer disclosure format, present it to the factory and see if theyêll work with you. If they will not, and you believe an alternative approach is consistent with the GM Dealer Sales and Service Agreement and appropriate for you and your customer, take NADAês advice and talk to your lawyer before going forward. GM could well be stepping beyond their bounds with this policy, but recall that no court or regulatory authority in Maryland or Virginia has yet determined that to be the case. Will GM reconsider its position in this matter, with or without NADA and the dealer associationsê prompting, and come forward with a posture more palatable to all their dealers? Maybe, maybe not.
4. As it stands today, GM dealers can follow GMês policy on non-GM parts and non-GM service contracts or not, recognizing that not to do so opens the door to sanctions the automaker said it will impose on their dealers who donêt comply.
For its part, WANADA will continue to monitor the situation in tandem with NADA, MADA and VADA and keep members informed of all developments when they occur.Download Bulletin PDF