Water Delay: Capitol Briefs 2025, Week 1

January 10, 2025

Week 1 of the Virginia General Assembly...sort of.

Earlier this week, members of the Virginia General Assembly convened in Richmond for the 2025 legislative session. Due to a water outage in the city, lawmakers briefly gaveled in on the second Wednesday of January (as is required under Virginia's constitution), and recessed until Monday, January 13, with hopes that Richmond's water will be restored by that time.

In anticipation of the upcoming session, VADA's legislative team continues to monitor bills being filed by lawmakers. The deadline for filing is Friday, January 17.

Our legislative agenda in 2025 is focused on promoting our proposed changes to Virginia's recall, warranty, and maintenance statute, where we aim to achieve greater protections for fair payment to Virginia's franchised dealers and their technicians.

Here is what our bill aims to do.

• Determination of Retail Compensation: In 2022, Virginia Code changed to address the determination of retail compensation to dealers for warranty and recall repairs by establishing a rebuttable presumption that a dealer's retail compensation amounts are reasonable, based on a statutory calculation. Under the current language, OEMs routinely challenge the reasonableness of a dealer's requested compensation by presenting evidence of lesser compensation amounts paid at other facilities. Our 2024 bill language seeks to remove the language that OEMs have relied on to challenge dealer's compensation requests.
• Parts Pricing Manipulation: In the context of recall and recall-like repairs, OEMs routinely slash parts prices to lessen the markup amount paid to dealers for the repair work while forcing dealers to stock up on recall parts that are unable to be returned. The bill sets recall part prices at the highest price reflected in the preceding 12 months and allows dealers to return unused parts.
• Full Payment for Diagnostic Time: As vehicle technology continues to advance, so does the time that technicians are forced to spend troubleshooting and diagnosing repairs. This bill guarantees that technicians are fairly compensated for that time.
• Payment of Rental Reimbursement: Virginia's current law requires OEMs to fully reimburse dealers for rental vehicles required, offered, advertised as available, or agreed-to by the OEM. Unusually long delays in parts availability may keep customers in rental vehicles for extended periods of time, with dealers fronting those costs. This bill allows dealers to seek reimbursement for rental vehicles from OEMs every 30 days, instead of at the completion of warranty repairs.