Chapter 218

218.0116(7)(d)4.a. a. “Fleet owner” means a person who owns for its own use or for the use of others 10 or more motor vehicles of the current or preceding model year manufactured or sold by the manufacturer, importer or distributor who is authorizing the warranty work to be performed.

218.0116(7)(d)4.b. b. “Fleet owner” does not include persons engaged in the business of leasing motor vehicles to individual consumers.

218.0116(7)(d)5. 5. The establishment or relocation of a motor vehicle dealership with respect to used motor vehicles under an agreement between the dealer and a manufacturer, importer or distributor is the establishment or relocation of a motor vehicle dealership.

218.0116(8) (8) 

218.0116(8)(a) (a) A manufacturer or distributor may not modify a motor vehicle dealer agreement during the term of the agreement or upon its renewal if the modification substantially and adversely affects the motor vehicle dealer’s rights, obligations, investment or return on investment without giving 60 days written notice of the proposed modification to the motor vehicle dealer unless the modification is required by law, court order or the licensor. Within the 60-day notice period the motor vehicle dealer may file with the department of transportation and the division of hearings and appeals and serve upon the respondent a complaint for a determination of whether there is good cause for permitting the proposed modification. The division of hearings and appeals shall promptly schedule a hearing and decide the matter. Multiple complaints pertaining to the same proposed modification shall be consolidated for hearing. The proposed modification may not take effect pending the determination of the matter.

218.0116(8)(b) (b) In making a determination of whether there is good cause for permitting a proposed modification, the burden of proof shall be on the manufacturer or distributor, except that the burden of proof with regard to the factor set forth in par. (b) 3. shall be on the dealer, and the division of hearings and appeals may consider any relevant factor including:

218.0116(8)(b)1. 1. The reasons for the proposed modification.

218.0116(8)(b)2. 2. Whether the proposed modification is applied to or affects all motor vehicle dealers in a nondiscriminating manner.

218.0116(8)(b)3. 3. The degree to which the proposed modification will have a substantial and adverse effect upon the motor vehicle dealer’s rights, investment, or return on investment.

218.0116(8)(b)4. 4. Whether the proposed modification is in the public interest.

218.0116(8)(b)5. 5. The degree to which the proposed modification is necessary to the orderly and profitable distribution of products by the respondent.

218.0116(8)(b)6. 6. Whether the proposed modification is offset by other modifications beneficial to the motor vehicle dealer.

218.0116(8)(c) (c) The decision of the division of hearings and appeals shall be in writing and shall contain findings of fact and a determination of whether there is good cause for permitting the proposed modification. The division of hearings and appeals shall deliver copies of the decision to the parties personally or by registered mail. The decision is final upon its delivery or mailing and no reconsideration or rehearing by the division of hearings and appeals is permitted.

218.0116(9) (9) Any person in interest aggrieved by a decision of the division of hearings and appeals or an order of the division of banking may have a review of the decision as provided in ch. 227.

218.0116(10) (10) In addition to the licensor’s authority to deny, suspend, or revoke a license under ss. 218.0101 to 218.0163, the division of banking, after public hearing, may issue a special order enjoining any licensee from engaging in any act or practice which is determined by the division of banking to be in violation of any provision of sub. (1), and the division of hearings and appeals may be petitioned to and, after notice and hearing, may issue a special order enjoining a licensee from engaging in any act or practice which the division of hearings and appeals determines to be in violation of any provision of sub. (1).

218.0116 History History: 1999 a. 31 ss. 123 to 187, 284 to 286; 1999 a. 186; 2003 a. 77, 326; 2005 a. 25, 256; 2007 a. 20; 2011 a. 91; 2013 a. 36; 2013 a. 168 s. 21; 2019 a. 4, 67; 2021 a. 240 s. 30; 2023 a. 267.

218.0116 Cross-reference Cross-reference: See also chs. Trans 137, 138, 139, and 140, Wis. adm. code.

218.0116 Annotation “Willful” under s. 218.01 (3) (a) 6. [now sub. (1) (cm)] means intentional. Fraud and malice are not elements. The state need not prove intent to deceive the buyer under s. 218.01 (3) (a) 18. [now sub. (1) (im) 2.]. DOT v. Transportation Commission, 105 Wis. 2d 678, 315 N.W.2d 371 (Ct. App. 1981).

218.0116 Annotation Affirmed. 111 Wis. 2d 80, 330 N.W.2d 159 (1983).

218.0116 Annotation Under s. 218.01 (3) (b) [now sub. (2)], the commissioner may conduct a de novo review of a Department of Transportation decision and may substitute the commissioner’s own judgment for that of the department. DOT v. Office of Commissioner of Transportation, 159 Wis. 2d 271, 463 N.W.2d 870 (Ct. App. 1990).

218.0116 Annotation A manufacturer’s assignment of territory to a dealer is part of their motor vehicle dealer agreement under sub. (8). Racine Harley-Davidson, Inc. v. Division of Hearings & Appeals, 2006 WI 86, 292 Wis. 2d 549, 717 N.W.2d 184, 03-2628.

218.0116 Annotation Perfect performance is not required to effectuate a “cure” under sub. (1) (i) 1. b. The statutory word “cured” encompasses the meaning of “cured” in contract law: the breaching party is to stop the offending conduct and to substantially perform the contract. Only if the breach is not cured to the level of substantial performance may the injured party terminate the contract. This meaning focuses on the performance of the breaching party, rather than on matters beyond the control of the breaching party, such as the conduct of third parties or on the effects of an economic recession. Volvo Trucks North America v. DOT, 2010 WI 15, 323 Wis. 2d 294, 779 N.W.2d 423, 08-1385.

218.0116 Annotation Section 218.01 (3) (a) 11. [now sub. (1) (f)] is applicable to manufacturers. Bob Willow Motors, Inc. v. General Motors Corp., 872 F.2d 788 (1989).

218.0116 Annotation A dealer’s refusal to sell the manufacturer’s products after filing a complaint under s. 218.01 (2) (bd) 2. [now s. 218.0114 (7) (d)] is a violation of that provision, and consequently of s. 218.01 (3) (a) 4. [now sub. (1) (bm)], entitling the manufacturer to treble damages under s. 218.01 (9) (am) [now s. 218.0163]. American Suzuki Motor Corp. v. Bill Kummer, Inc., 65 F.3d 1381 (1995).

218.0116 Annotation Sub. (1) (vm) and (wm) does not define the word “coerce,” but the ordinary meaning is to compel by threat or force, either physically or through economic means. Equating acts that “coerce” with “adverse actions” under sub. (1) (z) would lead to a definition of coerce that is overly broad in some respects and overly narrow in others. Applying the ordinary meaning of the word to this case, the defendant’s automobile dealership incentive program that offered incentives to dealerships that constructed or already had exclusive showrooms was not coercive. Dahl Automotive Onaslaska Inc. v. Ford Motor Co., 588 F. Supp. 3d 929 (2022).

218.0119 218.0119 Changes in places of business to be reported.

218.0119(1) (1) Before changing the location of a place of business or opening a new place of business in a municipality in which authorized to do business, a licensed dealer, distributor, or manufacturer shall apply to the department of transportation for an amended license. The department of transportation shall issue such license without charge.

218.0119(2) (2) Whenever a licensed dealer, distributor, manufacturer or transporter opens a new place of business, the licensee shall promptly report that fact, including the address of the new place of business, to the department of transportation.

218.0119(3) (3) Whenever a licensed dealer, distributor or manufacturer discontinues or disposes of his or her business, that dealer, distributor or manufacturer shall promptly report that fact to the department of transportation and return the license and registration plates issued. Whenever a licensed dealer, distributor or manufacturer discontinues business due to license suspension or revocation, that dealer, distributor or manufacturer shall surrender the licenses and registration plates to the department of transportation for the suspension or revocation period.

218.0119(4) (4) Any dealer, distributor, manufacturer or transporter who fails to comply with the requirements of this section may be required to forfeit not less than $100 nor more than $200.

218.0119 History History: 1999 a. 31 ss. 105 to 109; 2003 a. 215.

218.0119 Cross-reference Cross-reference: See also ch. Trans 138, Wis. adm. code.

218.0121 218.0121 Factory stores.

218.0121(1m) (1m) In this section:

218.0121(1m)(a) (a) “Agent” means a person who is employed by or affiliated with a factory or who directly or through an intermediary is controlled by or under common control of a factory.

218.0121(1m)(b) (b) “Control” means the possession, direct or indirect, of the power to direct or cause the direction of the management or policies of a person, whether through the ownership of voting securities, by contract or otherwise. “Control” does not include the relationship between a factory and a dealership under a basic agreement filed under s. 218.0114 (7) (a) 1.

218.0121(1m)(c) (c) “Dealer operator” means an individual who is vested with the power and authority to operate a dealership.

218.0121(1m)(d) (d) “Dealership” means a person licensed or required to be licensed as a motor vehicle dealer under ss. 218.0101 to 218.0163.

218.0121(1m)(dm) (dm) “Department” means the department of transportation.

218.0121(1m)(e) (e) “Factory” means a manufacturer, distributor or importer, or an agent of a manufacturer, distributor or importer.

218.0121(1m)(f) (f) “Operate” means to directly or indirectly manage a dealership.

218.0121(1m)(g) (g) “Ownership interest” means the beneficial ownership of one percent or more of any class of equity interest in a dealership, whether the interest is that of a shareholder, partner, limited liability company member or otherwise. To “hold” an ownership interest means to have possession of, title to or control of the ownership interest, whether directly or indirectly through a fiduciary or an agent.

218.0121(2m) (2m) A factory shall not, directly or indirectly, hold an ownership interest in or operate or control a motor vehicle dealership in this state.

218.0121(3m) (3m) This section does not prohibit any of the following:

218.0121(3m)(a) (a) A factory from holding an ownership interest in or operating a dealership for a temporary period, not to exceed one year, during the transition from one owner or dealer operator to another.

218.0121(3m)(b) (b) A factory from holding an ownership interest in a dealership, if all of the following apply:

218.0121(3m)(b)1. 1. The dealer operator of the dealership is an individual who is not an agent of the factory.

218.0121(3m)(b)2. 2. The dealer operator of the dealership is unable to acquire full ownership of the dealership with his or her own assets.

218.0121(3m)(b)3. 3. The dealer operator of the dealership holds not less than 15 percent of the total ownership interests in the dealership within one year from the date that the factory initially acquires any ownership interest in the dealership.

218.0121(3m)(b)4. 4. There is a bona fide written agreement in effect between the factory and the dealer operator of the dealership under which the dealer operator will acquire all of the ownership interest in the dealership held by the factory on reasonable terms specified in the agreement.

218.0121(3m)(b)5. 5. The written agreement described in subd. 4. provides that the dealer operator will make reasonable progress toward acquiring all of the ownership interest in the dealership, and the dealer is making reasonable progress toward acquiring all of the ownership interest in the dealership.

218.0121(3m)(b)6. 6. Not more than eight years have elapsed since the factory initially acquired its ownership interest in the dealership, unless the department, upon petition by the dealer operator, determines that there is good cause to allow the dealer operator a longer period to complete his or her acquisition of all of the ownership interest in the dealership held by the factory and the longer period determined by the department has not yet elapsed.

218.0121(3m)(c) (c) The ownership, operation or control of a dealership by a factory that does not meet the conditions under par. (a) or (b), if the division of hearings and appeals determines, after a hearing on the matter at the request of any party, that there is no prospective independent dealer available to own and operate the dealership in a manner consistent with the public interest and that meets the reasonable standard and uniformly applied qualifications of the factory.

218.0121(3m)(d) (d) The holding or acquisition, solely for investment purposes, of an ownership interest in a publicly traded corporation by an employee benefit plan that is sponsored by a factory.

218.0121 History History: 1999 a. 31 s. 110; Stats. 1999 s. 218.0121; 1999 a. 186; 2003 a. 77.

218.0122 218.0122 Damages to delivered vehicles.

218.0122(1) (1) A manufacturer, importer or distributor shall disclose in writing to a motor vehicle dealer, at or before delivery to the dealer, any damage and repair to a new motor vehicle occurring after the manufacturing process is complete but before delivery to the dealer, if the cost of the repair exceeds 6 percent of the manufacturer’s suggested retail price, as measured by retail repair costs. Replacement of glass, tires, bumpers, fenders, moldings, audio equipment, instrument panels, hoods and deck lids with identical manufacturer’s original equipment is not considered damage and repair under this subsection. If a manufacturer, importer or distributor fails to make a disclosure of damage and repair under this subsection, it shall be liable to the dealer for any liability imposed on the dealer for a failure on the part of the dealer to disclose that damage and repair.

218.0122(2) (2) If the cost of repairing damage to a new motor vehicle that occurs before delivery to the dealer’s location exceeds 6 percent of the manufacturer’s suggested retail price, as measured by retail repair costs, the dealer may reject or, if title has passed to the dealer, require the manufacturer, importer or distributor who delivered the vehicle to repurchase the vehicle within 10 business days after delivery, unless the damage occurred during shipment and the method of transportation, carrier or transporter of the motor vehicle was designated by the motor vehicle dealer. Upon repurchase, the manufacturer, importer or distributor shall be subrogated to all of the dealer’s rights against the carrier or transporter of the motor vehicle regarding damage. The cost of repairing glass, tires, bumpers, moldings and audio equipment with identical manufacturer’s original equipment shall not be included in determining the cost of repairing damage under this subsection.

218.0122(3) (3) This section does not apply to motorcycles that are delivered in a crated, disassembled condition to the dealer or the dealer’s agent.

218.0122 History History: 1999 a. 31 s. 111.

218.0123 218.0123 Vehicle allocations. No manufacturer, importer or distributor shall adopt, change, establish or implement a plan or system for the allocation, scheduling or delivery of new motor vehicles, parts or accessories to its motor vehicle dealers that is not fair, reasonable and equitable or modify an existing plan or system so as to cause the plan or system to be unreasonable, unfair or inequitable. Upon the request of any dealer franchised by it, a manufacturer, importer or distributor shall disclose in writing to the dealer the basis upon which new motor vehicles, parts and accessories are allocated, scheduled and delivered among the manufacturer’s, importer’s or distributor’s dealers of the same line make.

218.0123 History History: 1999 a. 31 s. 112.

218.0124 218.0124 Performance standards. Any performance standard or program for measuring dealership performance that may have a material effect on a dealer, and the application of any such standard or program by a manufacturer, importer or distributor, shall be fair, reasonable and equitable. Upon the request of any dealer, a manufacturer, importer or distributor shall disclose in writing to the dealer a description of how a performance standard or program is designed and all relevant information used in the application of the performance standard or program to that dealer.

218.0124 History History: 1999 a. 31 s. 113.

218.0125 218.0125 Warranty reimbursement.

218.0125(1) (1) In this section:

218.0125(1)(a) (a) “Dealer cost” means the wholesale cost for a part as listed in the manufacturer’s, importer’s or distributor’s current price schedules or, if the part is not so listed, the dealer’s original invoice cost for the part.

218.0125(1)(b) (b) “Qualifying nonwarranty repairs” means nonwarranty repairs that would be covered by the warranty of a manufacturer, importer, or distributor if the vehicle being repaired was covered by the warranty. The term does not include routine maintenance.

218.0125(2) (2) A manufacturer, importer, or distributor shall, for the protection of the buying public, specify the delivery and preparation obligations of its dealers before delivery of new motor vehicles to retail buyers. Except for a manufacturer, importer, or distributor of motorcycles with respect to a dealer of the manufacturer’s, importer’s, or distributor’s motorcycles, the specification shall be in writing. A copy of the delivery and preparation obligations of its dealers shall be filed with the department of transportation by every licensed motor vehicle manufacturer, importer, or distributor and shall constitute the dealer’s only responsibility for product liability as between the dealer and the manufacturer, importer, or distributor. Any mechanical, body, or parts defects arising from any warranties of the manufacturer, importer, or distributor shall constitute the manufacturer’s, importer’s, or distributor’s product or warranty liability.

218.0125(2m) (2m) A manufacturer, importer, or distributor of motorcycles with respect to a dealer of the manufacturer’s, importer’s, or distributor’s motorcycles shall reasonably compensate any authorized dealer who performs work to rectify the manufacturer’s, importer’s, or distributor’s product or warranty defects or delivery and preparation obligations or who performs any other work required, requested, or approved by the manufacturer, importer, or distributor or for which the manufacturer, importer, or distributor has agreed to pay, including compensation for labor at a labor rate equal to the effective labor rate charged all customers and for parts at an amount not less than the amount the dealer charges its other retail service customers for parts used in performing similar work by the dealer.

218.0125(3) (3) To be eligible for compensation for parts under sub. (2m), a dealer of motorcycles shall notify the manufacturer, importer, or distributor of motorcycles in writing of the amounts that the dealer charges its other retail service customers for parts and request that it be paid for parts in accordance with this section. The notice may be limited to the dealer’s average markup over dealer cost that the dealer charges its other retail service customers for parts used to perform similar work. The notice shall be served upon the manufacturer, importer, or distributor not less than 30 days before the date on which the dealer requests that the manufacturer, importer, or distributor begin paying the dealer for parts at the stated amounts. The manufacturer, importer, or distributor shall pay the dealer, as provided in this section, at the amounts stated in the dealer notice for parts used in work performed on and after the beginning date stated in the notice. This section applies to a manufacturer, importer, or distributor of motorcycles with respect to a dealer of the manufacturer’s, importer’s, or distributor’s motorcycles and those dealers.

218.0125(3m) (3m) 

218.0125(3m)(a) (a) Subject to sub. (4m), a manufacturer, importer, or distributor, except a manufacturer, importer, or distributor of motorcycles with respect to a dealer of the manufacturer’s, importer’s, or distributor’s motorcycles, shall reasonably compensate a dealer who performs work to rectify the product or warranty defects of the manufacturer, importer, or distributor or to satisfy delivery and preparation obligations of the manufacturer, importer, or distributor or who performs any other work required, requested, or approved by the manufacturer, importer, or distributor or for which the manufacturer, importer, or distributor has agreed to pay.

218.0125(3m)(b) (b) Reasonable compensation under par. (a) for labor is equal to the dealer’s effective nonwarranty labor rate multiplied by the number of hours allowed for the repair under the manufacturer’s, importer’s, or distributor’s time allowances used in compensating the dealer for warranty work. Reasonable compensation under par. (a) for parts is equal to the dealer’s cost for the parts multiplied by the dealer’s average percentage markup over dealer cost for parts.

218.0125(3m)(c) (c)

218.0125(3m)(c)1. 1. The effective nonwarranty labor rate is determined, using the submitted substantiating orders under sub. (4m) (a) 2., by dividing the total customer labor charges for qualifying nonwarranty repairs in the repair orders by the total number of hours that would be allowed for the repairs if the repairs were made under the manufacturer’s, importer’s, or distributor’s time allowances used in compensating the dealer for warranty work.

218.0125(3m)(c)2. 2. A dealer’s average percentage markup over dealer cost for parts is determined, using the submitted substantiating orders under sub. (4m) (a) 2., by dividing total charges for parts in the repair orders by the total dealer cost for the parts.

218.0125(4) (4) The manufacturer, importer, or distributor of motorcycles with respect to a dealer of the manufacturer’s, importer’s, or distributor’s motorcycles may require the dealer, at reasonable intervals, to provide the manufacturer, importer, or distributor with documents or information regarding a reasonable number of sales to other retail service customers of parts used by the dealer to perform similar work in order to substantiate that the amounts requested in the dealer’s notice are consistent with the amounts that the dealer charges its other retail service customers for parts used by the dealer to perform similar work.

218.0125(4m) (4m) 

218.0125(4m)(a) (a) To be eligible for compensation for labor or parts under sub. (3m), a dealer shall submit to the manufacturer, importer, or distributor all of the following:

218.0125(4m)(a)1. 1. A written notice of the claimed effective nonwarranty labor rate or average percentage markup over dealer cost for parts.

218.0125(4m)(a)2. 2. Either 100 sequential repair orders for qualifying nonwarranty repairs or all repair orders for qualifying nonwarranty repairs performed in a 90-day period, whichever is less. All repair orders under this subdivision must be for repairs made no more than 180 days before the submission.

218.0125(4m)(b) (b) Not more than 30 days after receiving a submission under par. (a), the manufacturer, importer, or distributor shall begin compensating the dealer based on the effective nonwarranty labor rate or average percentage markup over dealer cost for parts that is substantiated by the submission. If the manufacturer, importer, or distributor disputes the dealer’s claimed labor rate or markup, the manufacturer, importer, or distributor shall notify the dealer in writing that it disputes the labor rate or markup. A notice under this paragraph shall include a written explanation of the reason for the dispute, including the labor rate or markup that the manufacturer, importer, or distributor has determined is substantiated by the submission.

218.0125(5) (5) A manufacturer, importer, or distributor who fails to compensate a dealer for parts at an amount not less than the amount the dealer charges its other retail service customers for parts used to perform similar work shall not be found to have violated this section if the manufacturer, importer, or distributor shows that, for a manufacturer, importer, or distributor of motorcycles with respect to a dealer of the manufacturer’s, importer’s, or distributor’s motorcycles, the amount is not reasonably competitive to the amounts charged to retail service customers by other similarly situated franchised motor vehicle dealers in this state for the same parts when used by those dealers to perform similar work or, for any other manufacturer, importer, or distributor, the amount is not reasonably competitive to the amounts charged to retail service customers by other similarly situated franchised motor vehicle dealers in this state in performing qualifying nonwarranty repairs.

218.0125(6) (6) If a manufacturer, importer or distributor furnishes a part to a dealer at no cost for use by the dealer in performing work for which the manufacturer, importer or distributor is required to compensate the dealer under this section, the manufacturer, importer or distributor shall compensate the dealer for the part at an amount not less than the amount the dealer charges its other retail customers for parts when used to perform similar work less the wholesale cost for the furnished part as listed in the manufacturer’s current price schedules. A manufacturer, importer or distributor may pay the dealer a reasonable handling fee instead of the compensation otherwise required by this section for special high-performance complete engine assemblies furnished to the dealer at no cost, provided that the manufacturer, importer or distributor excludes special high-performance complete engine assemblies in determining whether the amounts requested in the dealer’s notice are consistent with the amounts that the dealer charges its other retail service customers for parts used by the dealer to perform similar work.

218.0125(7) (7) A claim made by a franchised motor vehicle dealer for compensation under this section shall be either approved or disapproved within 30 days after the claim is submitted to the manufacturer, importer or distributor in the manner and on the forms the manufacturer, importer or distributor reasonably prescribes. An approved claim shall be paid within 30 days after its approval. If a claim is not specifically disapproved in writing or by electronic transmission within 30 days after the date on which the manufacturer, importer or distributor receives it, the claim shall be considered to be approved and payment shall follow within 30 days. A manufacturer, importer or distributor retains the right to audit claims for a period of one year after the date on which the claim is paid and to charge back any amounts paid on claims that are false or unsubstantiated. If there is evidence of fraud, this subsection does not limit the right of the manufacturer to audit for longer periods and charge back for any fraudulent claim, subject to the limitations period under s. 893.93 (1) (cm).

218.0125 History History: 1999 a. 31 ss. 114 to 121; 2011 a. 91; 2015 a. 171; 2017 a. 235.

218.0126 218.0126 Promotional allowances. A claim made by a franchised motor vehicle dealer for promotional allowances or other incentive payments shall be either approved or disapproved within 30 days after the claim is submitted to the manufacturer, importer or distributor in the manner and on the forms the manufacturer, importer or distributor reasonably prescribes. An approved claim shall be paid within 30 days after its approval. If a claim is not specifically disapproved in writing or by electronic transmission within 30 days after the date on which the manufacturer, importer or distributor receives it, the claim shall be considered to be approved and payment shall follow within 30 days after approval. A manufacturer, importer or distributor retains the right to audit a claim for a period of 2 years after the date on which the claim is paid and to charge back any amounts paid on claims that are false or unsubstantiated. If there is evidence of fraud, this section does not limit the right of the manufacturer to audit for longer periods and charge back for any fraudulent claim, subject to the limitations period under s. 893.93 (1) (cm).

218.0126 History History: 1999 a. 31 s. 122; 2017 a. 235.