Servicing Facility Agreement (Class a and B Dealers Only) - Michigan

Servicing Facility Agreement (Class a and B Dealers Only) is a legal document that was released by the Michigan Secretary of State - a government authority operating within Michigan.

FAQ

Q: What is a Servicing Facility Agreement?A: A Servicing Facility Agreement is a contract between a dealership and a financial institution that outlines the terms and conditions for the dealership to provide servicing and maintenance for financed vehicles.

Q: Who can enter into a Servicing Facility Agreement in Michigan?A: Only Class A and B dealerships in Michigan are eligible to enter into a Servicing Facility Agreement.

Q: What are Class A and B dealerships?A: Class A and B dealerships are categories of licensed vehicle dealers in Michigan. Class A dealerships can sell new and used vehicles, while Class B dealerships can only sell used vehicles.

Q: What does the Servicing Facility Agreement cover?A: The agreement covers the responsibilities and obligations of the dealership to perform servicing, maintenance, and repairs on financed vehicles, as well as the financial institution's obligations to reimburse the dealership for approved services.

Q: Are there any requirements for the dealership to enter into a Servicing Facility Agreement?A: Yes, the dealership must meet certain financial and operational requirements set by the financial institution, such as having a certain level of insurance coverage and maintaining appropriate facilities and equipment.

Q: How long does a Servicing Facility Agreement typically last?A: The duration of the agreement can vary, but it is usually for a period of one to three years.

Q: Can a dealership terminate the Servicing Facility Agreement?A: Yes, either party can terminate the agreement with prior written notice, subject to any specific termination provisions outlined in the agreement.

Q: What happens if the dealership fails to meet its obligations under the Servicing Facility Agreement?A: The financial institution may impose penalties, such as withholding reimbursements or terminating the agreement, if the dealership fails to meet its obligations.

Q: Can a dealership enter into multiple Servicing Facility Agreements with different financial institutions?A: Yes, a dealership can have multiple servicing facility agreements with different financial institutions, as long as they meet the eligibility requirements of each institution.

Q: Is a Servicing Facility Agreement mandatory for dealerships in Michigan?A: No, it is not mandatory. Dealerships can choose whether or not to enter into a Servicing Facility Agreement with a financial institution.