California Investigating If Care By Volvo Subscription Breaches Franchise Laws

Volvo’s Care by Volvo subscription program is under fire in California and the target of an investigation from the state’s Department of Motor Vehicles.

Auto News reports that, on August 15, California’s New Motor Vehicle Board unanimously voted to direct the DMV to investigate Care by Volvo and claims that it violates provisions of the state vehicle code as suggested by the dealers association.

The California New Car Dealers Association submitted a petition to the New Motor Vehicle Board in January claiming that its review of the Care by Volvo subscription service found what it claims are violations of California franchise and consumer protection laws.

Also Read: Driven – 2019 Volvo XC40 Exudes Swedish Sophistication

The DMV will review whether a. Care by Volvo diverts customers from dealerships to Volvo, b. the Swedish car manufacturer failed to properly notify franchisees and the board about the program, c. Care by Volvo preferentially allocates vehicles and sales to select dealerships, and d. the program “undermines the purpose of prohibiting payment packing.”

The program launched in 2017 and has proved very successful for the automaker who, nevertheless, claims it has made changes after getting feedback from dealers.

“Volvo Car USA is committed to developing Care by Volvo in collaboration with our retailers to offer the flexibility of subscription side-by-side with traditional lease and financing,” Volvo USA said in a statement. “We continue to improve the program, which will soon enable retailers to complete subscription purchases and provide instant vehicle delivery. Volvo Car USA believes the addition of a subscription option on the sales floor will benefit both customers and retailers.”

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  • salamOOn

    customers first, right….?

    • Kash

      as my dad always said, if companies actually believed in the “the customer is always right” BS then companies would at most, be charging their cost to customers for their goods/services if not just giving it to them for free.

  • Maisch

    I don’t get the us laws, are you forced to sell through the car through the dealers?

    • Kash

      In some places, yes. Tesla had major issues with this, and still kind of does. In some states or counties they still can’t sell their cars. It’s pretty stupid, but then again the automotive industry in the US is pretty wack, just look at detroit automakers trying to deal with the union or simply sell a plant they aren’t using anymore to someone who wants to use it to make cars.

      • Maisch

        Yeha, when you mention it i do remember tesla getting in troubble. Its a bit weird that in several aspects the market is more free in what americans would call “a socialist country” where I live. Powerful lobbyists and other power factors play in here of course. Even mr. president try to interfere and throw out threats whenever the car industry is shutting down a plant.

  • robotlogic

    Happy to hear that the California DMV has solved all the other major problems like hit and runs and 10% of drivers with no licence or insurance so that they can go after something so insignificant.

  • Jumpingmatt

    The franchise laws and regulations they are clinging to are blatantly anti-consumer. They may slow their demise, but it is no less inevitable. Car dealers are a market inefficiency that competition and better experiences will render obsolete sooner or later.

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