Illinois Multiplier Act: A Game Changer for Mechanics

Illinois Multiplier Law: How It Protects Dealer Auto Technicians and Car Warranty Repairs

As someone deeply familiar with the auto repair industry,

Click on the image to download a PDF copy of the Illinois Motor Vehicle Franchise Act

I’ve seen firsthand how unfair the system was for dealer auto technicians when it came to car warranty repairs. Before the Illinois Multiplier law was passed, technicians at new car dealerships were getting paid less for warranty repairs than for the exact same job if the customer paid out of pocket.

That system made no sense. Imagine doing the same job but getting paid a fraction of the rate—just because it was a car warranty repair. That’s exactly what dealer auto technicians dealt with for years.

Why the Illinois Multiplier Law Was Desperately Needed

Let me explain the problem clearly. Automakers were using vague language in the old laws. They only had to pay dealers “reasonable” rates for warranty work. But guess who got to define “reasonable”? The automakers themselves.

It wasn’t uncommon for a job that should take 21 hours—like replacing a cylinder head—to be reimbursed for just 10.5 hours under a car warranty claim. That left dealer auto technicians earning far below what the job was actually worth.

This broken system led to:

• Skilled dealer auto technicians refusing car warranty jobs because they couldn’t afford the pay cut.
• Mechanics quitting, leaving dealerships scrambling.
• Less experienced techs being forced to handle complex warranty work.

How the Illinois Multiplier Law Fixed This Mess

When the Illinois Multiplier law went into effect in January 2022, it changed everything. Now, manufacturers must pay dealer auto technicians the same labor rate for car warranty repairs as for customer-paid repairs.

And if there isn’t a set labor time for the job, the law requires manufacturers to pay 1.5 times their own listed labor time. That’s why it’s called the Multiplier law.

Who Pays? Not You

If you’re wondering whether this raised costs for customers, it didn’t. Car warranty repairs are still free to car owners. The extra money comes from the auto manufacturers, many of whom are giant corporations headquartered out of state or even overseas.

The Real-World Impact of the Illinois Multiplier Law

This law isn’t just words on paper—it’s made a massive difference:

Dealer auto technicians across Illinois are earning $143 million more each year.
Employee turnover at dealerships dropped by 9%—because technicians are finally being paid what they’re worth.
Mechanics are working slightly more hours, meaning dealerships can handle more repairs efficiently.
Illinois’ economy grew by $302 million per year thanks to the Illinois Multiplier law.
State and local governments are generating an additional $42 million in tax revenue each year.

A Safer, More Reliable Repair Process for You
When dealer auto technicians are paid fairly for car warranty work, they can take the time needed to diagnose and repair your vehicle properly. You benefit because:

Repairs are done right the first time

Skilled technicians stay in the industry instead of quitting.
Dealerships can retain top talent instead of constantly training replacements.

Strong Support and Legal Pushback

This wasn’t a controversial law in Illinois—it passed with huge bipartisan support. It was backed by:

Auto mechanic unions
Dealer associations
Labor organizations

Of course, not everyone was happy. Volkswagen sued the state, claiming the law was unfair. But the courts dismissed the case, siding with Illinois’ right to ensure that dealer auto technicians are paid fairly for car warranty work.

Other States Are Taking Notice

Illinois is leading the way, but we’re not alone. California, Minnesota, Wisconsin, and Montana have already passed similar laws. Colorado and Texas are considering following Illinois’ lead on the Multiplier law.

Bottom Line: The Illinois Multiplier Law Works

As an industry expert, I can tell you that the Illinois Multiplier law is a win for everyone, except maybe the automakers who had been underpaying for years.

It ensures that:

Dealer auto technicians are paid fairly for all repairs, including car warranty work.
Car owners still pay nothing for warranty repairs.
The Illinois economy is stronger, with better jobs and more tax revenue.
Repairs are done correctly and safely, with experienced technicians on the job.
This law isn’t just about fairness for mechanics—it’s about ensuring the entire auto repair system works better for customers like you.

It also creates a much stronger incentive for car makers to design their cars and individual components better before releasing them. For the first time in decades, carmakers will have to pay the real costs of fixing their design mistakes.

Illinois Volkswagen and Audi Dealers Sue Over Warranty Cost Surcharges Tied to Illinois Multiplier Law

Volkswagen and Audi dealers in Illinois are pushing back hard against Volkswagen Group of America’s latest attempt to shift costs onto dealerships. The dealers have filed a formal lawsuit, accusing the automaker of violating Illinois law by charging them for warranty-related expenses tied directly to the Illinois Multiplier law.

What’s Driving the Dispute?

It all comes down to the Illinois Multiplier law, part of the state’s Motor Vehicle Franchise Act, which went into effect on January 1, 2022. This law requires automakers to reimburse dealer auto technicians for car warranty repairs at the same labor rate that customers pay for out-of-warranty repairs. Essentially, it eliminated the long-standing practice of reimbursing warranty repairs at significantly lower rates.

Volkswagen didn’t take the change lightly. The company sued Illinois in December 2022, claiming that the law had driven up their warranty-related costs by 50%, resulting in nearly $10 million in additional payments to Illinois Volkswagen and Audi dealers. That lawsuit was tossed out by a federal court in May 2023.

Volkswagen’s Controversial Response

Rather than accept the court’s decision, Volkswagen Group of America announced a new policy in July 2024 to recover those warranty costs. Starting September 1, Volkswagen began debiting money directly from dealers’ parts accounts. The company is calculating the additional costs created by the Illinois Multiplier law each quarter and spreading those costs across new vehicles sold to Illinois dealers. A surcharge is applied to each dealership’s open parts account, effectively forcing dealers to pay back what Volkswagen claims the law unfairly costs them.

Dealers Fight Back

The response from dealers was swift and fierce. On September 13, 2024, 28 Volkswagen and nine Audi dealers filed a formal protest with the Illinois Motor Vehicle Review Board. Their argument is simple: this surcharge violates the state’s Motor Vehicle Franchise Act, which clearly prohibits automakers from passing warranty reimbursement costs back to dealers.

Joe McMahon, Executive Director of the Illinois Automobile Dealers Association (IADA), called out the surcharge as illegal and warned that if Volkswagen gets away with this, other automakers may follow.

Dealers’ Main Concerns

The dealers argue that Volkswagen’s new policy creates several serious problems:

The surcharge amounts are unpredictable, calculated only after warranty work is completed, meaning dealers can’t account for the cost when setting prices for customers.

It shifts the financial burden of VW’s product quality and reliability problems squarely onto the dealers.

It undermines the purpose of the Illinois Multiplier law, which was designed to ensure fair pay for dealer auto technicians performing car warranty repairs.

What Happens Next?

The Illinois Motor Vehicle Review Board will assign a hearing officer to mediate the dispute. The process is expected to take up to a year. Both the IADA and the Chicago Automobile Trade Association are providing financial and legal support to help the dealers fight back.

©, 2025 Rick Muscoplat