All Roll Calls
Yes: 198 • No: 2
North CarolinaSB 2952025-2026 SessionSenateWALLET
AN ACT TO CLARIFY VARIOUS MOTOR VEHICLE DEALER LAWS.
Sponsored By: Brent Jackson (Republican), Michael A. Lazzara (Republican), Vickie Sawyer (Republican)
Signed by Governor
COMMERCECORPORATIONS, FOR-PROFITFRANCHISESMOTOR VEHICLESPRESENTEDPUBLICRATIFIEDRETAILINGTRANSPORTATIONCHAPTERED
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Bill Overview
Analyzed Economic Effects
8 provisions identified: 7 benefits, 0 costs, 1 mixed.
Dealers get stronger termination protections
Beginning July 1, 2025, a manufacturer cannot end a dealer’s franchise unless the Commissioner, after a hearing, finds good cause and good faith. If the dealer asks for review on time, the franchise stays in place during the case. Dealers get at least 180 days to fix performance issues, and good cause requires enough vehicles and the right model mix. The Commissioner aims to decide within 180 days (90 days for some cases). If the Commissioner allows termination, the order is paused during appeals if the dealer posts court‑approved security within 30 days. Dealers under notice keep full rights to sell or transfer the franchise, and a sale cannot be ended for the seller’s past failures.
Guaranteed inventory buyback when franchises end
Beginning July 1, 2025, when a franchise ends, the manufacturer must buy back each new, unsold vehicle or trailer the dealer acquired within the past 24 months. The vehicle must have no title issued, be undamaged, and have under 1,000 miles (2,500 miles for motor homes). This shifts the cost of recent unsold inventory back to the manufacturer.
Higher, clearer pay for dealer warranty work
Beginning July 1, 2025, manufacturers must give each dealer a written list of duties and a pay schedule for prep, delivery, warranty, recall, and related programs. Pay for warranty and recall work must be at least the dealer’s current retail labor rate and retail price for original parts, and include diagnostics, shipping, and required disposal fees. Dealers can set their retail rate by submitting 100 sequential nonwarranty orders or 60 days of orders from the past 180 days. Low‑margin items like oil changes, tires, batteries, and wholesale‑priced parts are excluded from the rate calculation. Makers may not unreasonably deny written requests for more time on specific warranty repairs when supported by documentation.
Dealer pay and rules for software features
Beginning July 1, 2025, makers must give dealers a written list of over‑the‑air features that can be bought, the customer price at sale or lease, and that buyers may purchase them from the dealer. Makers must provide a current, itemized dealer pay schedule for these items and, on request, up to six months of sales and commission details. Free remote software updates done during warranty or recall work do not count as dealer warranty work. Work for commercial fleets labeled by the maker is also excluded.
Dealers can reject unsellable or undelivered cars
Beginning July 1, 2025, makers cannot force dealers to take unsellable new vehicles. On a written request, the maker must refund and take back within 30 days vehicles with open recalls unfixable within 30 days, missing or inoperable parts not on the invoice, or unresolved stop‑sale orders for 30 days. Dealers may also get a refund if a vehicle claimed as shipped is not delivered within 120 days.
Easier dealership sales, transfers, and successions
Beginning July 1, 2025, the Commissioner can override a manufacturer’s refusal if it is unreasonable, letting dealer sales or transfers proceed after a timely request and hearing. Approval cannot be tied to building or renovating, changing line‑makes, or giving a right of first refusal. Makers cannot use past denials by other brands or past lawsuits against a candidate. The review focuses only on fitness (training, experience, performance, character), and a qualified, good‑character candidate is presumed fit. To claim poor past performance, the maker must prove below‑average results using the prior three calendar years and specific data. Owners may name a successor by will or other writing. If a turndown is finally overturned as unreasonable after all state appeals, the maker must pay both sides’ attorney fees.
Limits on audits and dealer costs
Beginning July 1, 2025, routine audits of warranty, recall, used‑vehicle, and incentive claims may happen only once every 12 months and may cover only the 12 months after payment, unless for cause or fraud. For‑cause notices must explain the data behind the audit. Makers must reimburse dealers for actual loaner or rental costs when the maker required or approved the vehicle; if the dealer opted out of the maker’s loaner program, pay may be limited to the program’s daily rate plus taxes and fees. Dealers may submit rental claims in 30‑day blocks when repairs are delayed by the maker. Makers also cannot charge different prices for training, software, equipment, or tools based on image‑program compliance.
Clear rules for selling and subscriptions
Beginning July 1, 2025, the law defines which actions count as selling or leasing, such as taking deposits, VIN‑specific reservations (unless promptly assigned to an authorized dealer), setting retail price, and negotiating trade‑ins. It also lists exclusions like setting MSRP, general financing ads, and lemon‑law repurchases. Offering new vehicles as a subscription counts as being a dealer, but anyone providing a subscription or monthly rental program on or after January 1, 2025 is excluded. Businesses that offered subscriptions before 2025 may need a dealer license.
Sponsors & Cosponsors
Sponsors
Brent Jackson
Republican • Senate
Michael A. Lazzara
Republican • Senate
Vickie Sawyer
Republican • Senate
Cosponsors
Paul Newton
Republican • Senate
Lisa S. Barnes
Republican • Senate
Jr. Danny Earl Britt
Republican • Senate
Warren Daniel
Republican • Senate
Amy S. Galey
Republican • Senate
Bobby Hanig
Republican • Senate
Todd Johnson
Republican • Senate
Timothy D. Moffitt
Republican • Senate
Brad Overcash
Republican • Senate
Roll Call Votes
Senate vote • 6/23/2025
SB 295: Clarify Motor Vehicle Dealer Laws.
Yes: 46 • No: 0 • Other: 3
House vote • 6/18/2025
SB 295: Clarify Motor Vehicle Dealer Laws.
Yes: 109 • No: 2 • Other: 9
Senate vote • 5/6/2025
SB 295: Clarify Motor Vehicle Dealer Laws.
Yes: 43 • No: 0 • Other: 5
Actions Timeline
Ch. SL 2025-41
7/1/2025SenateSigned by Gov. 7/1/2025
7/1/2025SenatePres. To Gov. 6/25/2025
6/25/2025SenateRatified
6/24/2025SenateOrdered Enrolled
6/23/2025SenateConcurred In H Com Sub
6/23/2025SenatePlaced On Cal For 06/23/2025
6/20/2025SenateWithdrawn From Com
6/20/2025SenateRef To Com On Rules and Operations of the Senate
6/18/2025SenateSpecial Message Received For Concurrence in H Com Sub
6/18/2025SenateSpecial Message Sent To Senate
6/18/2025HousePassed 3rd Reading
6/18/2025HousePassed 2nd Reading
6/18/2025HousePlaced On Cal For 06/18/2025
6/17/2025HouseCal Pursuant Rule 36(b)
6/17/2025HouseReptd Fav
6/17/2025HouseRe-ref Com On Rules, Calendar, and Operations of the House
6/11/2025HouseReptd Fav Com Substitute
6/11/2025HouseRe-ref to the Com on Transportation, if favorable, Rules, Calendar, and Operations of the House
6/5/2025HouseWithdrawn From Com
6/5/2025HouseRef To Com On Rules, Calendar, and Operations of the House
5/6/2025HousePassed 1st Reading
5/6/2025HouseSpecial Message Received From Senate
5/6/2025HouseSpecial Message Sent To House
5/6/2025SenatePassed 3rd Reading
5/6/2025Senate
Bill Text
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Filed
Latest Edition
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