New Mexico
State law entitles a franchised dealer to warranty compensation at the rates it charges its own retail customers, and it narrows the grounds a manufacturer can use to turn a proposed rate down. Most New Mexico stores are still being paid at a figure they never challenged.
N.M. Stat. Ann. § 57-16-7 · Warranty and recall claims; compensation at retail rates
What you are owed
Retail rate
Warranty labor and diagnostic work are compensated at the rates you charge your retail customers, and parts at your own average markup on what you paid for them.
When it takes effect
30 days
A new rate takes effect 30 days after you submit it. Separately, a warranty claim not disapproved in writing within 30 days is deemed approved.
How often you may file
Twice a year
An increase may be granted no more than twice in one calendar year. More room than most states allow, which makes a wasted attempt easier to repeat and no less costly.
Recovering the cost
Prohibited
The manufacturer may not recover what it pays you, either by cutting the amount it owes you or through a separate charge, surcharge or other imposition.
Why It Is Not A Form
New Mexico does not hand you a rate. You prove one from your own customer-paid repair orders, and the manufacturer may decline it if it was calculated incorrectly. The statute is shorter than most, and that is not the same as simple. Short statutes leave more room for a manufacturer to argue about what your numbers mean.
The statute lets a manufacturer reject a proposed rate if it was calculated incorrectly. That is the ground most rejections stand on, and it is decided by whatever in your submission does not reconcile with the repair orders behind it.
The other ground is a rate that unreasonably exceeds every other franchised dealer of the same line in your market area. The test is narrow, but a rate pushed past what you can support invites exactly that comparison.
New Mexico does not carve out the long list of excluded work other states do. That widens what you can count, and it moves the argument to the manufacturer's own policies and audit practice, where the statute says little and the burden of a clean file is yours.
You are entitled to resubmit after a decline, but the rate you were unhappy with keeps paying every repair order until a new one takes effect.
The Part Most Dealers Miss
Manufacturers often answer a rate request by asking for a different method, a different sample or a different calculation. New Mexico closes that off. The statute says the manufacturer shall not require a dealer to establish its average percentage markup by another methodology, and it limits a rejection to a rate that was calculated incorrectly or that unreasonably exceeds every other same-line dealer in your market.
It also protects the warranty work you find during a customer-pay visit: a covered warranty or recall repair discovered that way cannot be denied when you document it. The law has drawn the lines. What decides the result is whether your submission stays inside them.
We Do This For You
John Fairchild has run more than 400 warranty reimbursement filings himself. You do not pull the repair orders, decide what qualifies, or argue the categories. We build the submission, you review it before it goes anywhere, and it goes out under a rate we are prepared to defend.
Most filings come back in 45 to 60 days. That depends heavily on the manufacturer, and on whether they ask for additional repair orders before they answer, which every statute allows them to do.
And because your rate is proven out of your own customer-pay pricing, we do not stop when the letter is sent. The platform runs the daily discipline that protects that pricing all year, which is what decides how high you can go the next time you are allowed to ask.
No cost, no obligation. We will tell you the rate you could defend today and whether filing is worth running at all.
Summary of N.M. Stat. Ann. § 57-16-7 as published by the State of New Mexico, reviewed July 2026. Statutes change; we re-verify before every filing.