A little-known provision in Oklahoma's new motor vehicle franchise law gives dealers a crucial safety net when a manufacturer walks away.
Most Oklahoma auto dealers don't realize that a new state law—effective November 1, 2026—has quietly rewritten what happens to their inventory if a manufacturer terminates or cancels their franchise.
The provision is buried in SB604, a bill that overhauled Oklahoma's motor vehicle franchise statutes. But for dealers, especially smaller operations, it addresses one of the most painful scenarios in the business: a manufacturer ending the relationship and leaving the dealer holding unsold new vehicles they financed through floor-plan loans.
Under Section 2 of SB604 (amending § 565.2), if a manufacturer terminates, cancels, or fails to renew a franchise agreement and the manufacturer prevails in any dispute, the manufacturer must still repurchase all unsold new vehicle inventory from the dealer. The key protection: the repurchase price cannot be less than the dealer's full net acquisition price—meaning what the dealer actually paid for the vehicles.
This is not a negotiable discount. It's a floor.
Floor-plan inventory is typically a dealership's single largest asset. When a manufacturer-dealer relationship ends badly, dealers have historically faced a nightmare: vehicles they financed sit on the lot, interest accrues, and they're forced to accept pennies on the dollar to move them. Some dealers have been forced into insolvency.
SB604's repurchase requirement changes that equation. Even if the manufacturer wins a legal dispute over the franchise termination, they cannot simply abandon the dealer with stranded inventory. They must buy it back at cost—protecting the dealer from catastrophic loss on their largest investment.
This applies to any Oklahoma auto dealer operating under a franchise agreement with a manufacturer. The protection kicks in specifically when:
• A manufacturer terminates the franchise agreement
• A manufacturer cancels the agreement
• A manufacturer fails to renew the agreement
• The manufacturer prevails in any resulting legal action
The repurchase obligation covers all unsold new vehicles in the dealer's inventory at the time of termination.
The provision becomes effective November 1, 2026. Dealers should review their franchise agreements now to understand their current protections and compare them against this new statutory floor. If your agreement is weaker than what SB604 requires, the law will override it.
Document your net acquisition price on every new vehicle you finance. Keep clear records of floor-plan loans and payoff amounts. If you're negotiating a new or renewed franchise agreement before November 2026, consider whether the manufacturer's repurchase terms meet or exceed the statutory requirement.
The law doesn't eliminate franchise disputes—but it does eliminate one of the worst outcomes: being left with unsold inventory you can't move at a loss the manufacturer won't cover.
SB604, Section 2 (amending § 565.2), effective November 1, 2026. For a detailed, business-specific summary of how this applies to your dealership, contact your trade association or legal counsel.