CONCORD, N.H., May 22, 2013 — Auto dealers will have greater flexibility in their dealings with auto manufacturers after the House voted on Wednesday 338-30 to approve Senate Bill 126.
The "Auto Dealers Bill of Rights" changes business practices between manufacturers and their dealers, giving local auto and construction and farm equipment dealers more flexibility to run their franchises. All other states have similar laws.
Supporters say the bill will level the playing field for the dealers who have said they are often held hostage to the manufacturers' demands.
But opponents believe the bill overturns existing business contracts and rather than leveling the playing field tilts it significantly in favor of the dealers.
SB 126 has been a battleground this session including an ad campaign by manufacturers trying to derail a bill that had a full head of steam coming out of the Senate with a 21-2 vote.
Manufacturers say the bill is unprecedented and will drive up costs for consumers, adversely affect their brand image and their efforts to make auto purchasing more consumer friendly.
But local auto dealers say they are often threatened with loss of their franchises if they do not bow to manufacturers' demands to update showrooms and change signs and locations.
Rep. Pam Tucker, R-Stratham, said the bill protects the property rights of local auto and equipment dealers.
"Dealer-manufacturer relations are grossly unbalanced right now. It is truly unfair," Tucker said. "This bill will eliminate a monopoly structure that requires all autos to be sold through a franchise in our state. Right now, across the U.S. a consumer can buy a vehicle only through a dealership."
But manufacturers argue the bill's protections for New Hampshire auto dealers are far greater than other states and override existing contracts.
Catherine Mulholland, D-Grafton, said the bill is an example of the legislative attempting to micromanage the industry and but totally inappropriate.
"SB 126 would not just level the playing field," Mulholland said, "but tip it violently in favor of the dealers."
Opponents said if dealers believe they are not treated fairly they should go to court to challenge manufacturers' unreasonable demands not come to lawmakers to change the rules in mid-stream.
"Seeking redress through the courts is suicide for a dealer," said Rep. Emily Sandblade, R-Manchester. "The private property rights of both parties are protected, not just one and it helps eliminate elements of coercion."
SB 126 includes a "buy local" provision allowing dealers to use New Hampshire contractors and suppliers when updating facilities and limits upgrades to once every 15 years. Most states have a 10-year limit on mandated updates.
The bill also requires manufacturers to pay dealers retail rates for labor and parts when they perform warranty work and requires manufacturers to open their inventory and sales files to dealers.
After the vote, NH Automobile Dealers Association President, Pete McNamara said, "This proposal will stop the unfair spending mandates passed down to us from manufacturers, and will require basic fairness in the relationship."
The bill's provisions also cover equipment and farm and construction equipment dealers.
The bill has to go back to the Senate due to changes the House made in the bill.