A new Oklahoma law gives dealership owners a critical protection when a manufacturer ends their franchise—but most don't know it exists yet.
Most Oklahoma auto service and dealership owners don't realize that a provision buried deep in SB604 creates a hard legal requirement that could protect their largest asset when a franchise relationship ends. Understanding this rule now—before November 1, 2026, when it takes effect—matters for your business planning and financial security.
Under Section 2 of SB604 (Motor vehicles; definitions; merging multiple versions of statutes; termination, cancellation, or nonrenewal of a franchise; repealer), manufacturers must repurchase a dealer's inventory and equipment within 90 days of terminating, canceling, or failing to renew a franchise agreement.
Specifically, the manufacturer must buy back:
The 90-day window is a hard deadline. This isn't a suggestion or a negotiation point—it's a legal obligation with a fixed timeline.
For dealership owners, new vehicle inventory and capital equipment represent some of the largest financial commitments in the business. When a franchise ends unexpectedly, that inventory can become difficult or impossible to sell through normal channels. Without a repurchase requirement, dealers have faced situations where they're stuck holding vehicles and equipment they can't move, with no clear path to recover their investment.
SB604 changes that equation. By creating an enforceable 90-day repurchase obligation, the law shifts financial risk back to the manufacturer—the party with the power to terminate the relationship. This protects your working capital and floor-plan financing obligations.
This provision applies to any Oklahoma auto dealership or service operation with a franchise agreement subject to state law. If you sell new vehicles or maintain manufacturer-supplied inventory and equipment, SB604's protections apply to you.
The law becomes effective November 1, 2026. That gives you time to review your current franchise agreements and understand how this new requirement changes your position—but that window is closing. If your franchise agreement contains language that conflicts with this requirement, the state law will override it.
Review your franchise agreement to identify any language about inventory buyback, termination procedures, or asset disposition. Understand what your current agreement says versus what SB604 now requires. If you're in active franchise negotiations, this is relevant context for those discussions.
The specifics of how repurchase price is calculated, what condition inventory must be in, and how disputes are resolved are all details worth understanding before a termination scenario arises.
Source: SB604, Section 2, Page 11; effective November 1, 2026. For a detailed, business-specific summary of how this provision affects your operation, contact your trade association or legal counsel.