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Bill to strengthen motor vehicle franchis act progressing in Springfield

November 15, 2010
Contact your rep to support SB 1417

A state bill to protect dealers if a manufacturer eliminates a line should be brought before the Illinois House by May 8. Senate Bill 1417 passed the Senate unanimously April 2.

Under the legislation, dealers would have added protection against what constitutes good cause for a manufacturer to cancel or fail to renew a franchise or selling agreement.

Among other things, SB1417 would force manufacturers that discontinue a brand to prove good cause before the Illinois Motor Vehicle Review Board before terminating any dealers. Also, such a manufacturer must buy back new vehicles, parts and equipment from franchised dealers.

Senate Bill 1417 also would make it a violation for a manufacturer to require or coerce a dealer to underutilize the dealer’s facilities by blocking the dealer from selling or servicing any vehicles that fall under another manufacturer’s franchise agreement. And, the bill provides an itemized list of what is considered reasonable compensation to a dealer for the value of the franchise and business premises, as well as a payment scheme for such compensation.

The legislation also winnows the audit period for dealer incentives and reimbursement claims, from 18 months to 12 months, to coincide with the audit period for warranty claims. Also, it prohibits manufacturers from denying access to certain dealers when selling factory pre-owned vehicles, and it amends the definition of "motor vehicle" to include truck engines, transmissions and rear axles for trucks that weigh more than 16,000 pounds.

Dealers are urged to contact their House representatives, to encourage a "yes" vote on SB 1417. The Illinois State Board of Elections provides a search tool on its Web site that enables individuals to search for legislators using three criteria: by District, by Official, or by Address. Follow the link on the CATA Web site, at