National Agreement on right-to-repair is detrimental to franchised dealers

National Agreement on right-to-repair is detrimental to franchised dealers

Four automaker and aftermarket associations have signed a national Memorandum of Understanding (MOU) and Agreement promising not to fund state right-to-repair laws, leaving NADA concerned that franchised dealer protections are missing. Right-to-repair laws, first conceived in Massachusetts, ensure that independent repair facilities have access to the same information and tools as dealers selling that make.

The signers of the MOU are the Alliance of Automobile Manufacturers, the Association of Global Automakers, the Automotive Aftermarket Industry Association and the Coalition for Auto Repair Equality. The MOU is similar to the Massachusetts right-to-repair law adopted in 2013, but the MOU – a five-year agreement, not a federal law – drops several dealer protections that are in the state law, says NADA attorney Doug Greenhaus.

The Massachusetts law, but not the MOU, recognizes dealers as independent repair facilities. That is important for dealers to be able to repair cars of makes other than the ones they sell. The language in the Massachusetts law, says Greenhaus, gives dealers the same rights as independent repair shops.

But the national MOU introduces price, saying that OEMs must offer the repair information to independents at a fair and reasonable price. Independents are not required to buy particular tools, as dealers selling that make are. With that and other manufacturer requirements, such as mandatory facility upgrades, dealers cost structure can be significantly higher than that of independents, Greenhaus notes.