Title 32, MOTOR VEHICLES

No franchisor may, directly or through an officer, agent, or employee, terminate, cancel, fail to renew, or substantially change the competitive circumstances of a vehicle dealership agreement without good cause. For the purposes of this section, good cause means failure by a veh…

No franchisor may enter into a franchise for the purpose of establishing an additional vehicle dealership in any community in which the same line - make is currently represented, unless the franchisor has first established in a hearing held under the provisions of chapter 1-26 th…

In determining whether cause is established for entering into an additional franchise for the same line - make, the department shall consider the existing circumstances, including, but not limited to: (1) The amount of business transacted by existing franchisees of the same line …

The following circumstances are not cause for the termination or noncontinuance of a franchise, nor for entering into a franchise for the establishment of an additional dealership in a community for the same line - make: (1) The change of executive management or ownership by the …

No franchise agreement may include any term or condition in a franchise that: (1) Requires the franchisee to waive trial by jury involving the franchisor; (2) Specifies the jurisdictions, venues or tribunals in which disputes arising with respect to the franchise, lease or agreem…

The following persons are exempt from the licensing requirements of this chapter: (1) Any employee of any person licensed as a vehicle dealer if engaged in the specific performance of the employee's duties; (2) Any financial institution chartered or licensed in any other jurisdic…

A person who is a licensed dealer in another state may sell motorcycles at an event without a license issued under this chapter if the person meets the provisions of this section. Before selling any motorcycle, the person shall register and purchase a permit from the department. …

A person who is a licensed dealer in another state may sell trailers at an event without a license issued under this chapter if the person meets the provisions of this section. Before selling any trailer, the person shall register and purchase a permit from the department. Before…

A person who is a licensed dealer in another state may sell a vehicle that is at least twenty years old or a motorcycle that is at least thirty years old at a public auction on consignment without a license issued under this chapter if the person meets the provisions of this sect…

A person who is engaged in the business of manufacturing trailers may display any trailer at an event without a license issued under this chapter if the person meets the provisions of this section. Before displaying any trailer, the person shall register and purchase a permit fro…

A person who is engaged in the business of manufacturing or customizing motor vehicles may display and offer limited demonstration of a person's customized motor vehicle at an event without a license issued under this chapter if the person meets the provisions of this section. Be…

A person who is sponsoring an event for displaying customized motorcycles built for the event may do so without a license issued under this chapter if the person meets the provisions of this section. Before displaying any such motorcycle, the person sponsoring the event shall reg…

If a franchisor seeks to enter into an additional franchise of the same line-make, the franchisor shall file a notice with the department of the franchisor's intention to enter into a franchise for additional representation of the same line-make. Source: SL 1986, ch 250 , § 51; S…

Upon receiving a notice of intention seeking to establish an additional franchise of the same line-make in a particular community, a copy of the notice shall be sent within five days of receipt to all franchisees in the community who are engaged in the business of offering to sel…

Any person who receives or is entitled to receive a copy of any notice provided for in § 32-6B-50 , may object to the approval of the notice by filing a written objection to the department within fifteen days from the date the notice was received by such person. If no objection i…

If a timely objection is filed, the department shall enter an order fixing the time, which shall be within thirty days of the date of such order, and place of a hearing on the objection and shall send by first class mail a copy of the order to the franchisor, franchisee, and any …

Upon a hearing conducted under the provisions of chapter 1-26 , the franchisor has the burden of proof to establish that cause exists to enter into a franchise establishing an additional dealership. Source: SL 1986, ch 250 , § 55; SL 2010, ch 156 , § 10, eff. Mar. 9, 2010.

If a franchisor is not permitted to enter into a franchise for the line-make in the community, no such franchise may thereafter be entered into for the sale of such vehicles in the community unless the franchisor thereafter establishes, in a subsequent hearing held under the prov…

If a franchisor enters into or attempts to enter into a franchise for an additional new vehicle dealership in a community where the same line-make is already represented, without first complying with the provisions of this chapter, no dealer's license may be issued to that franch…

The provisions of §§ 32-6B-45 to 32-6B-56 , inclusive, do not apply to any trailer franchisee dealing in trailers with a weight of three thousand pounds or less. This section may not be construed to exclude such a franchisee from the licensing and other requirements contained in …

It shall be unlawful for a franchisor to offer to sell or to sell any new vehicle to any franchisee at a lower actual price therefor than the actual price charged to any other franchisee for the same model vehicle similarly equipped or to utilize any device including, but not lim…

Every franchisor, component manufacturer, or manufacturer shall properly fulfill any warranty agreement and compensate, as set forth in § 32-6B-61 , each of its vehicle dealers for labor and parts. The franchisor, component manufacturer, or manufacturer shall pay all claims made …

A franchisor, component manufacturer, or manufacturer that provides a separate warranty for an engine, transmission, or rear axle installed in a commercial medium- and heavy-duty on-highway vehicle, as defined in 49 U.S.C. § 32901(a)(7) as of January 1, 2021, shall compensate any…

Except as provided in § 32-6B-58.3 , a manufacturer or component manufacturer may not charge back to a vehicle dealer any warranty claim that has been paid and approved for any vehicle or any part, component, complete assembly, or subassembly for a vehicle if: (1) The repair work…

A manufacturer or component manufacturer may charge back a warranty claim if: (1) The claim was false or fraudulent; or (2) The repairs were not necessary to correct the defective condition under accepted standards of workmanship. Source: SL 2023, ch 100 , § 3.

In addition to the remedies provided in this chapter, the department may make application to any circuit court of this state to grant a temporary or permanent injunction, or both, restraining any person from acting as a vehicle dealer under the terms of this chapter without being…

Any person selling vehicles pursuant to the requirements of this chapter shall file with the department, upon forms provided by the department, an application including the following: (1) The name and address of the applicant; (2) The name of the firm or copartnership, with the n…

The secretary of revenue may adopt rules pursuant to chapter 1-26 as may be necessary to ensure and obtain uniformity in the administration of this chapter. All local officials charged with the administration of the provisions of this chapter are governed in their official acts b…

The schedule of compensation for warranty work shall include reasonable compensation for diagnostic work, as well as repair service, parts, and labor. Time allowances for diagnosis and performance of warranty work and service shall be adequate for the work to be performed. The ho…

The provisions of subdivision 32-6B-6(16) and subdivision 32-6B-41(13) do not apply to a trailer dealer's license. Source: SL 1991, ch 246 ; SL 2019, ch 130 , § 16.

The Department of Revenue may promulgate rules, pursuant to chapter 1-26 , to regulate the advertising of vehicles offered for sale by vehicle dealers. The department may promulgate rules concerning the following: (1) Price advertising; (2) Availability of vehicles; and (3) Gener…

For the purposes of § 32-6B-63 the term, advertising, means any oral, written, or graphic statement which offers for sale a particular vehicle or vehicle parts and services or which indicates the availability of a vehicle or vehicle goods or services. The term includes any statem…

Any manufacturer of trailers located in the state and who has registered with the department as a manufacturer of trailers may use an in - transit permit to operate any of the manufacturer's trailers upon the streets and highways of this state for in - transit purposes and for tr…

The department shall prescribe, by rules promulgated pursuant to chapter 1-26 , the size, color, material, and design of the trailer manufacturer in - transit permits as provided by § 32-6B-66 . The department shall also provide, by rule, the process for registering trailer manuf…

No franchisor may modify a franchise during the terms of the franchise or upon its renewal if the modification would substantially and adversely affect the vehicle dealer's rights, obligations, investment, or return on investment without giving at least sixty days notice of the p…

A franchisor may reasonably and periodically audit a franchisee to determine the validity of paid claims or chargebacks for customer or dealer incentives. An audit of incentive payments may apply only for a period of one year after the claims are paid to the dealer. The limitatio…

Before any license is issued, the applicant shall deliver to the department a good and sufficient surety bond, executed by the applicant as principal and by a surety company qualified to do business in the state as surety. The bond shall be for an amount based upon the type of li…

Members of any incorporated automobile dealers association may join together for the limited purpose of forming a pool of assets to satisfy the bond requirements of § 32-6B-7 . Each pool shall be deposited in escrow or trust with a South Dakota financial institution approved of b…

To implement any increase in the amount of a dealer bond, a dealer, upon renewal of a bond or upon annual renewal of a dealer license, whichever comes first, shall deliver to the department an original bond or a bond rider that is issued by the surety company showing the new bond…

No sell - it - yourself lot operator may engage in the following business activities concerning any vehicle on a sell - it - yourself lot premises, unless licensed in accordance with the provisions of this chapter: (1) Sell, offer to sell, or negotiate the sale of any vehicle; (2…

The owner of a vehicle dealership may appoint by trust, will, or any other valid written instrument a successor to the owner's dealership interest upon the owner's death or incapacity. Unless the franchisor has good cause to refuse to honor the succession, the successor may succe…

If a franchisor believes that good cause exists to refuse to honor the intended succession under § 32-6B-71 , the franchisor shall serve the named successor written notice of refusal to honor the intended succession within sixty days of its receipt of the notice of intended succe…

In order to transfer, assign, or sell a franchise agreement or controlling interest in the dealership to another person, a dealer shall notify the manufacturer or franchisor whose vehicles the dealer is franchised to sell of the dealer's decision to transfer, assign, or sell the …

The notice shall be in writing and shall include: (1) The prospective transferee's name, address, financial qualifications, and business experience; (2) A copy of pertinent agreements regarding the proposed transfer, assignment, or sale; (3) Completed application forms and relate…

Not later than the sixty days after receiving notice and application as provided by §§ 32-6B-73 to 32-6B-78 , inclusive, the manufacturer or franchisor shall determine whether or not the dealer's prospective transferee is qualified and shall send a letter by certified mail, retur…

Approval by a manufacturer or franchisor of an application filed under §§ 32-6B-73 to 32-6B-78 , inclusive, may not be unreasonably withheld. It is unreasonable for a manufacturer or franchisor to reject a prospective transferee who otherwise meets the manufacturer's or franchiso…