The Fight Between Dealers and Automakers Over Subscription Services
What are automotive subscription services?
Auto dealer fraud attorneys help car buyers and lessees enforce their rights and obtain compensation when auto dealers engage in deceptive and unlawful practices in violation of consumer protection laws.
In that regard, attorneys are well-versed in and recognize common types of auto dealer fraud which include:
- inflating the invoice price
- bait and switch
- add-on concealment
- car misrepresentations
- yo-yo financing
- prior accidents or flood damage, and more.
Recently, new trends which impact the automobile industry have emerged, including ridesharing and subscription services. Rather than pitting consumers against automakers and dealers, these newer trends may pit automakers against dealers.
When automakers noticed the popularity of ridesharing services like Uber and Lyft and feared a significant percentage of the population was content in not owning a car, automakers got into the ridesharing business. Dealers, not seeing a threat to their car sales or leasing businesses by automakers claiming a piece of the ridesharing market, had no objection to it. But that isn’t the case with the emergence of subscription services.
A “newfangled trend” in the auto industry is subscription services that allow people to pay a flat monthly rate—which includes insurance and repairs and other costs—and access vehicles as they please. One day, they may want an SUV, another day a sports car. This new trend, as you might expect, comes with a high price tag of several thousands of dollars per month.
This time, dealers are pushing back against automakers’ attempts to grab a share of the subscription services market. The dealers argue that unlike ridesharing, a subscription service is similar to leasing and will impact dealerships’ bottom line.
Since automakers are prohibited from making direct sales and leases with consumers, dealers argue that automakers should similarly be excluded from the subscription service market. So far, legislators in California apparently agree that dealers should remain the intermediary between automakers and consumers and passed a bill in the Assembly that would effectively ban automakers from the subscription services market. Automakers and consumer advocates fear that this could “limit competition and potentially lead to higher prices”.
Subscription services are new and only offered currently through high-end dealers like Porsche, BMW, Cadillac, and Volvo and some start-ups. But, it will be interesting to see how subscription services play out in the future.
If you feel you’ve been the victim of dealer fraud, have a breach of warranty claim, or feel you may be driving a lemon because your relatively new car is always in the shop for the same repair, the Law Offices of Timothy Abeel & Associates can help you. Depending on the nature of your problem you may be entitled to a full refund of your down payment, trade-in, monthly payments and taxes, or a brand-new car or a cash settlement. Contact us today for a free consultation.