The New Jersey Coalition of Automotive Retailers (NJ CAR) today filed suit against Lincoln in New Jersey State Superior Court seeking a “declaratory judgment” that the company’s Lincoln Commitment Program violates the state’s clear prohibition against two-tier pricing.
The suit was filed on the eve of a February 1, 2020 deadline imposed by Lincoln for dealers to pony up $20,000 and commit to the program, which requires dealers to make extensive facilities and operational upgrades. Most of the Garden State’s 18 Lincoln dealerships have questioned Lincoln and complained to NJCAR that these requirements simply do not make financial sense. Failure to sign on to the program or to meet its stringent facilities and operational requirements will result in dealers losing up to 5.75% in potential discounts that Lincoln will be offering to compliant dealers as soon as July 1, 2020.
“Two-tier pricing programs, like the one being pushed on Lincoln dealers at this time, tear at the very fabric of the franchise system,” said Jim Appleton, President of NJ CAR, which represents the Garden State’s 510 franchised new car and truck retailers. “The New Jersey Legislature, in 2011, outlawed such programs, because lawmakers found them to be a destabilizing force in the marketplace, with the potential to force local business owners to make investments that don’t offer a realistic return on investment or driving them out-of-business, thereby reducing competition and limiting consumer access to service.”
The New Jersey Motor Vehicle Franchise Practices Act includes language that specifically prohibits a manufacturer from selling or refusing to sell or offer product to “all motor vehicle franchisees at the same price for a comparably equipped motor vehicle, on the same terms, with no differential in discount, allowance, credit or bonus … ”
NJ CAR sees the Lincoln suit as a “test case,” with industry-wide application. “This lawsuit doesn’t seek damages, “ Appleton explained. “We’re just looking for the court to issue a definitive ruling that the plain language of the New Jersey statute means something and that automakers must abide by the law. NJCAR filed the lawsuit asserting Lincoln dealer rights, but a favorable ruling in this case would help dealers in other line-makes protect themselves against unreasonable and unfair two-tier pricing programs that have become commonplace among just about all automakers,” Appleton said.
About The New Jersey Coalition of Automotive Retailers
The New Jersey Coalition of Automotive Retailers (NJ CAR), founded in 1918, is a non-profit organization serving approximately 510 franchised car and truck retailers throughout New Jersey. NJ CAR promotes the principals of commercial honor and integrity in the sale and service of motor vehicles. The Coalition keeps its members informed on a variety of business matters, practices, trends, and legislation. NJ CAR also works to ensure all members are educated to assure regulatory compliance.
Click HERE to access a complete copy of the complaint