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North CarolinaSB 2952025-2026 SessionSenate

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

7 provisions identified: 6 benefits, 1 costs, 0 mixed.

Refunds for unsellable or late vehicles

Beginning July 1, 2025, the maker must refund and take back a new vehicle you cannot sell because of an open recall, missing or inoperable parts not on the invoice, or an unresolved stop sale that cannot be fixed within 30 days. The maker must act within 30 days after your written request. If a vehicle was not delivered within 120 days after the maker said it shipped, you can also ask in writing for a refund and takeback.

Stronger dealer termination and buyback protections

Manufacturers cannot end your franchise for poor performance unless they first supplied enough vehicles and the right mix. If your franchise ends or you close, the maker must buy back new, untitled vehicles you got in the last 24 months. Normal new vehicles must have under 1,000 miles; RV motor homes qualify under 2,500 miles. Trailers and similar units are included when part of the franchise. RV motor home dealers get these same buyback protections.

Better pay and audit limits for service

Beginning July 1, 2025, makers must give you a written list of duties and a pay schedule for warranty, recall, and related work. Pay for warranty and recall work must be at least your current retail labor rate and your retail price for comparable parts. You can set retail rates by sending either 100 sequential nonwarranty repair orders or 60 consecutive days of such orders, with firm 30-day timelines for audits, rebuttals, and protests. Makers must fully reimburse required or approved loaner/rental costs, with a daily cap only if you opted out of the maker’s program; you can bill every 30 days during maker-caused delays. Some jobs are excluded from rate calculations (like tires, alignments, routine maintenance, and engine/transmission assemblies). Makers cannot unreasonably deny written requests for extra time on specific warranty repairs. Routine audits are limited to once every 12 months and can only review the 12 months after payment; for-cause audits need detailed written evidence.

Fair rules for dealer transfers and managers

Manufacturers cannot make transfer approval depend on building or renovating your facility, adding or dropping brands, exclusive layouts, or a right of first refusal. They cannot reject an applicant because another maker once denied them, or because the applicant filed a lawsuit. If a denial is overturned as unreasonable after all state appeals, the maker must pay your and the applicant’s attorneys’ fees. For changes in executive management, the maker must prove unfitness using specific data from only the last three calendar years, and cannot use stores you owned for under two years. Owners may name a successor by will or writing, and the dealer approves the principal operator under its bylaws.

When these dealer rules apply

Starting July 1, 2025, this law applies to all current and future agreements between North Carolina new motor vehicle dealers and manufacturers or distributors. That means existing and new franchise relationships follow these rules on and after that date.

More businesses now count as dealers

Businesses that offer new vehicles by subscription, or that perform any warranty or recall work, now count as motor vehicle dealers. This brings them under dealer rules and duties. The rule does not cover warranty work on designated commercial fleet customers or free remote software updates to owners or lessees.

New selling, OTA pay, and tool rules

Makers that sell over‑the‑air features for a fee must give you an itemized dealer pay schedule and, on request, six months of sales and gross receipts data. Starting July 1, 2025, “selling” includes taking deposits, VIN‑specific reservations, negotiating price or terms, and 12‑month or longer retail leases; MSRP setting and general ads are not selling. The law defines “special or essential tools” as maker‑required tools not readily available elsewhere. Beginning July 1, 2025, makers cannot change tool, software, training, or equipment prices based on your facility image compliance.

Sponsors & Cosponsors

Sponsors

  • Brent Jackson

    Republican • Senate

  • Michael A. Lazzara

    Republican • Senate

  • Vickie Sawyer

    Republican • Senate

Cosponsors

  • Buck Newton

    Republican • Senate

  • Lisa S. Barnes

    Republican • Senate

  • Danny Earl Britt, Jr.

    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

All Roll Calls

Yes: 198 • No: 2

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

  1. Ch. SL 2025-41

    7/1/2025Senate

  2. Signed by Gov. 7/1/2025

    7/1/2025Senate

  3. Pres. To Gov. 6/25/2025

    6/25/2025Senate

  4. Ratified

    6/24/2025Senate

  5. Ordered Enrolled

    6/23/2025Senate

  6. Concurred In H Com Sub

    6/23/2025Senate

  7. Placed On Cal For 06/23/2025

    6/20/2025Senate

  8. Withdrawn From Com

    6/20/2025Senate

  9. Ref To Com On Rules and Operations of the Senate

    6/18/2025Senate

  10. Special Message Received For Concurrence in H Com Sub

    6/18/2025Senate

  11. Special Message Sent To Senate

    6/18/2025House

  12. Passed 3rd Reading

    6/18/2025House

  13. Passed 2nd Reading

    6/18/2025House

  14. Placed On Cal For 06/18/2025

    6/17/2025House

  15. Cal Pursuant Rule 36(b)

    6/17/2025House

  16. Reptd Fav

    6/17/2025House

  17. Re-ref Com On Rules, Calendar, and Operations of the House

    6/11/2025House

  18. Reptd Fav Com Substitute

    6/11/2025House

  19. Re-ref to the Com on Transportation, if favorable, Rules, Calendar, and Operations of the House

    6/5/2025House

  20. Withdrawn From Com

    6/5/2025House

  21. Ref To Com On Rules, Calendar, and Operations of the House

    5/6/2025House

  22. Passed 1st Reading

    5/6/2025House

  23. Special Message Received From Senate

    5/6/2025House

  24. Special Message Sent To House

    5/6/2025Senate

  25. Passed 3rd Reading

    5/6/2025Senate

Bill Text

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