N. Carolina Restricts Captives

North Carolina, a ground-breaking state in broadening franchise law restrictions on automakers, has adopted some more.

Effective Dec. 1, auto makers are forbidden from requiring dealers to use their captive lenders to finance construction projects or floorplan vehicles.

Secondly, a new amendment requires factory-dealer meetings prior to assessment of charge-backs for warranty claims. This amendment also compels automakers to disclose details of audit sampling techniques when selecting dealers to audit.

“These changes will allow a level playing field for franchised dealers to conduct business,” says Robert J. Glaser, executive vice president of the North Carolina Automobile Dealers Assn.