SB 5377
In CommitteeSenate
Motor vehicle dealers
Concerning auto sales.
This status may be delayed. See Action History below for the latest updates.
How does a bill become law?
- Introduced: The bill is filed and assigned a number.
- Committee: A subject-matter committee holds hearings, takes public testimony, and decides whether to advance the bill.
- Floor Vote: The full chamber (House or Senate) debates and votes on the bill.
- Opposite Chamber: The bill repeats the committee and floor vote process in the other chamber.
- Governor: The Governor reviews the bill and decides whether to sign or veto it.
- Signed: The bill has been signed into law.
AI Analysis
This bill strengthens protections for new car dealers in Washington by banning discriminatory pricing, unfair allocation practices, and anti-competitive behavior by manufacturers. It also limits manufacturers’ ability to own or operate dealerships and restricts their power to force facility upgrades or franchise changes on dealers.
- Prohibits manufacturers from charging different actual prices for the same vehicle, parts, or accessories to different dealers, unless specific exceptions apply (e.g., government sales, fleet programs).
- Bars manufacturers from using unfair or discriminatory methods to allocate, schedule, or deliver vehicles and parts to dealers, and requires written disclosure of such methods upon request.
- Prevents manufacturers from interfering with a dealer’s right to charge a documentary service fee on special purchase programs (e.g., employee, affinity, or family programs).
- Bars manufacturers from competing with dealers by owning or operating dealerships—except in limited, specified cases (e.g., temporary transitions, diversity initiatives, or truck manufacturers with long-standing operations).
- Bars manufacturers from requiring dealers to make costly facility changes (over $5,000) before the 10-year anniversary of the facility’s construction or last major remodel, unless required for health/safety or technology compliance.
Who is affected
- New motor vehicle dealers — Auto dealers in Washington who sell new vehicles, parts, or accessories; the bill strengthens their protections against unfair practices by manufacturers.
- Vehicle manufacturers and distributors — Car manufacturers, distributors, and their affiliates, who must now follow stricter rules about pricing, vehicle allocation, and facility requirements.
- Consumers — Consumers may benefit from more consistent pricing and potentially more dealer choice, as the bill aims to level the playing field among dealers.
- Multi-brand or expanding dealers — Dealers who want to sell multiple vehicle brands or expand operations may find it easier under the new rules against coercion and unfair restrictions.
Pro/Con Analysis
Stronger case for benefits
Potential Benefits (5)
The bill prohibits discriminatory pricing for identical vehicles, parts, or accessories among dealers, unless specific exceptions apply (e.g., fleet, government). This levels the playing field for independent dealers and reduces manufacturer leverage over smaller dealers.
Business & EmploymentRef: Sec. 1(1)(a)-(c)The bill bars discriminatory allocation/scheduling methods for vehicles and parts and requires written disclosure upon request. This increases transparency and fairness in supply chain access for dealers.
Business & EmploymentRef: Sec. 1(1)(d)The bill bars manufacturers from refusing reasonable deliveries to compliant dealers or unreasonably requiring advertising displays or facility remodels as prerequisites for vehicle allocation. This protects dealers from coercive tactics.
Business & EmploymentRef: Sec. 1(1)(f)The bill broadly restricts manufacturer ownership or operation of dealerships, with limited exceptions (e.g., diversity initiatives, temporary transitions, truck manufacturers, legacy manufacturers). This preserves the independent dealer franchise model and prevents direct competition from manufacturers.
Business & EmploymentRef: Sec. 1(1)(g)-(r)The bill prohibits manufacturers from owning or operating service facilities for vehicles under warranty or extended warranty, except for manufacturer-owned vehicles. This protects dealers’ service revenue streams and prevents unfair competition in after-sales services.
Business & EmploymentRef: Sec. 1(1)(h)
Potential Concerns (5)
The bill prohibits manufacturers from requiring costly facility upgrades (over $5,000) before the 10-year anniversary of a dealership’s construction or last major remodel, unless required for health/safety or technology compliance. This reduces capital burden on dealers and provides predictability in facility planning.
Business & EmploymentRef: Sec. 1(1)(l)The bill bars manufacturers from coercing dealers into exclusivity agreements or prohibiting them from selling multiple brands, unless the restriction is supported by reasonable business considerations (burden of proof on manufacturer). This increases dealer autonomy and potential for multi-brand operations.
Business & EmploymentRef: Sec. 1(1)(k)The bill requires manufacturers to approve or reject proposed changes in dealer executive management within 60 days, with written justification; failure to respond results in automatic approval. This protects dealer independence in personnel decisions.
Business & EmploymentRef: Sec. 1(1)(m)The bill prohibits manufacturers from conditioning franchise renewal or incentives on site control (e.g., purchase/lease rights to dealer facilities) or requiring substantial renovations (>$5,000) without justification. This protects dealer asset control and reduces financial coercion.
Business & EmploymentRef: Sec. 1(1)(n)The bill limits manufacturers’ ability to impose unreasonable areas of primary responsibility (APRs) on dealers, requiring APRs to be based on objective geographic and demographic criteria within Washington. This improves fairness in territory assignment and reduces arbitrary performance penalties.
Business & EmploymentRef: Sec. 1(1)(p)
Who Is Most Affected
Dealers benefit significantly: reduced coercion, fairer pricing, protection from forced facility upgrades, and expanded autonomy to sell multiple brands. This strengthens small-to-mid-sized dealer independence and financial stability.
Manufacturers face increased compliance costs, reduced flexibility in pricing, allocation, and facility requirements, and limited ability to operate their own dealerships. These constraints may reduce profit margins and strategic control, especially for EV-focused or direct-sales manufacturers.
Consumers may benefit modestly from more consistent pricing and potentially more dealer choice, but the bill does not directly cap prices or guarantee lower costs. Any benefit is indirect and likely small relative to broader market forces.
Multi-brand or expanding dealers gain significant advantage: the bill explicitly protects their right to sell multiple brands and prohibits coercive exclusivity clauses. This lowers barriers to expansion and strengthens bargaining power with manufacturers.