The VADA focused on two critical pieces of legislation affecting Virginia’s car dealers during the 2022 General Assembly session:
- The priority legislation, HB 259 (Wyatt)/SB 216 (McPike), supported fair warranty/recall reimbursement. The bill addressed the continued struggles new car and truck dealerships face when seeking warranty reimbursement at retail amounts. Furthermore, the bill required full reimbursement for dealers for customer rental vehicles while warranty/recall repairs were made. The bill also required that the dealership and its technicians be compensated for their time when assisting customers with software updates at the dealership. Finally, the bill will protect consumers from unknown software upgrade charges through up-front disclosures by the manufacturer. Governor Youngkin signed the legislation on April 27, 2022, and the bill went into effect on July 1, 2022.
- The Virginia Overtime Wage Act was also a focus for the VADA in 2022. During the 2021 General Assembly session, lawmakers sought to create a state remedy for violations of federal overtime requirements. Unfortunately, the bill’s language went far beyond that intended result, making substantive changes to overtime requirements for many Virginia employers. Federal law lays out various exemptions to overtime requirements that specify exemptions for auto dealership employees. During the special session in the summer of 2021, the VADA fixed this problem with budget language; however, that fix was temporary until July 2022.
To address this issue permanently, the VADA proposed HB 1173 (Ware) and SB 631 (Barker). The legislation solved the overtime issue by incorporating all the federal exemptions, including the auto dealer-specific exemptions. The Governor signed the legislation on April 11, 2022, and the bill went into effect on July 1, 2022.
Coming in 2023:
The VADA’s legislative focus now turns to the franchise system. OEMs are moving to the “agency model” in New Zealand, Australia, Canada, and the EU. OEMs are experimenting with the “agency model” in the U.S., whether it is Audi or VW with online reservation systems. VW Scout brand provides no information to dealers on access to these EVs. Ford has been aggressive in their remarks about the EV reservation system and how dealerships will change significantly with EVs. VADA must remain vigilant and maintain the franchise system that benefits the consumer by fostering competition, providing options and lowering prices.