Texas Warranty Reimbursement

Texas Dealers: Your State Law Guarantees Higher Warranty Rates

Tex. Occ. Code § 2301.402–2301.404 · 17-24% typical uplift

Texas law supports dealer warranty reimbursement claims. Our AI maximizes your rate increase.

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Texas Warranty Reimbursement Law

Texas Occupations Code Chapter 2301 includes dealer protections with warranty reimbursement provisions. Large dealer market with significant uplift potential.

Tex. Occ. Code § 2301.402–2301.404

State Tier

medium

Submission Deadline

No specific statutory deadline

OEM Response Window

30 days

What This Means for Your Dealership

Texas law is clear and direct: a manufacturer cannot pay a dealer less for warranty work than what the dealer charges a retail customer for similar work. That's not a guideline — it's a statutory requirement under the Texas Occupations Code.

Texas is one of the largest dealer markets in the country, and the Texas Department of Motor Vehicles actively oversees franchise compliance. The state's dedicated Subchapter I (Warranties: Reimbursement of Dealer) shows how seriously Texas takes this issue. For Texas dealers, the combination of high warranty volumes, competitive retail rates, and strong statutory language creates significant uplift potential.

The 30-day payment requirement after claim approval also means you'll see the money quickly once your new rate is in effect.

Key Provisions

  • Manufacturers cannot pay dealers less than what retail customers pay for similar nonwarranty work
  • Dealers can request adjustments to their warranty labor rate
  • Claims must be paid within 30 days of approval
  • Texas Department of Motor Vehicles oversees compliance
  • Comprehensive franchise protection under Subchapter I (Warranties: Reimbursement of Dealer)
  • Fair and adequate compensation is a statutory requirement

What's Excluded from Calculations

The following repair types and transactions are typically excluded when calculating your retail warranty reimbursement rate:

  • Goodwill and policy repairs
  • Internal and employee vehicle work
  • Wholesale transactions
  • Manufacturer recall campaigns

Full Statute Text

Tex. Occ. Code § 2301.402–2301.404Texas Warranty Reimbursement Law

Source: Texas State Legislature — This text is provided for informational purposes. Always consult the official state legislature website for the most current version.

Example: How Much Could You Recover?

A Texas dealership processing 240 warranty ROs per month at $255 average generates $734,000 annually. With 17-24% uplift, that's $125,000-$176,000 in additional annual revenue. Multi-rooftop Texas operations with 5+ locations can see combined recoveries exceeding $750,000.

Pro Tips for Texas Dealers

1.

Texas law explicitly says OEMs can't pay less than retail — use this exact statutory language in your submission

2.

The Texas Department of Motor Vehicles is active in enforcement — manufacturers take Texas submissions seriously

3.

Texas' massive dealer market means there's plenty of precedent for successful rate increases — your submission is part of a well-worn path

Texas Warranty Reimbursement FAQ

What does Texas law say about warranty reimbursement?

Texas Occupations Code § 2301.402 states that a manufacturer 'may not pay or reimburse a dealer an amount of money for warranty work that is less than the amount the dealer charges a retail customer for similar nonwarranty work.'

How quickly does the manufacturer have to pay approved claims?

Under Texas law (§ 2301.404), manufacturers must pay approved warranty reimbursement claims within 30 days of approval.

How much can Texas dealers recover?

Texas dealers typically see 17-24% increases, translating to $125,000-$176,000 per year. Multi-rooftop operations can recover $750,000+.

Estimate Your Annual Uplift

See what your dealership could be earning in additional warranty reimbursement.

1
200
$

Estimated Annual Uplift

$97,920$138,240

Texas is a medium-tier state for warranty reimbursement. Learn more →

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