States May Challenge Car Subscription Schemes

Car dealer groups in the U.S. may soon begin to lobby for curbs on vehicle subscription services as a substitute for their usual sell/lease business, says Automotive News.

Dealers are wary of such schemes, which currently are being tested by several carmakers. The services enable subscribers to frequently swap vehicles within a pool of varying models and body types.

So far, such plans cost considerably more per month than the average cost of a conventional car payment.

Retailers mainly want to make sure that subscription plans are operated through the dealer franchise system, AN reports. They have been suspicious of schemes that invite consumers to sign up online through a manufacturer’s website rather than at the dealership level.

Dealers worry that their profit margins and inventories of salable new vehicles could shrink if subscription options become popular, according to the newspaper. They also fret about being compensated to manage and maintain subscription fleets, warranty work, licensee fees and other costs associated with such fleets.

Only two states have taken any action to date. Indiana ordered a moratorium on any vehicle subscription program through next April. California has been considering a law that would block manufacturers from bypassing their dealers by offering direct subscription plans.