“We knew in 2018 that it was a provision that we really didn’t want to accept, but we did accept it as a compromise. As a result of 2018, our dealers got increases largely across the board. But now we’re in this period of inflation, our dealerships are having trouble hiring and retaining techs,” Jackson said, pointing to Colorado’s high cost of living as a driving factor.
That brought the Colorado Automobile Dealers Association back before the legislature for another stab at increasing rates. In late January, a bipartisan group of legislators introduced a new amendment, removing much of the complex procedure put in place in 2018 and mandating instead that the manufacturer “must pay the retail labor rate multiplied by the applicable time allowances prescribed in the labor time guide used by the dealer.”
The proposed new legislation is still in committee in the Colorado legislature, but its impact could be dramatic, said Matthew Tynan, whose family owns Nissan and Volkswagen stores in Aurora, Colo. Tynan said that had the legislation been in place in 2022, his two stores would have generated an extra $308,980 in revenue from service.
He listed four of his experienced technicians by name, saying they “benefit when we have increased revenue, because not only does their pay go up, but the culture, the treatment, the training and the tools we provide enhance their ability to make a better living and have a better lifestyle,” Tynan testified. “Because these aren’t just jobs, these are careers.”
The Colorado bill’s fate remains uncertain. While it was voted out of its first committee appearance without changes, the vote was split, and its sponsors said they remain open to compromises with manufacturers that, thus far, would prefer it simply go away.
“This bill is an unreasonable attempt to force manufacturers to overpay dealers for warranty,” said Nick Steingart, director of state affairs for the Alliance for Automotive Innovation. “It would force automakers to pay Colorado auto dealers millions of dollars in unnecessary fees every year. It’s unnecessary, unfair and creates substantial costs that will ultimately hurt consumers in the state of Colorado.”
Lindsay VanHulle and Urvaksh Karkaria contributed to this report.