Volvo’s first subscription program sparked the outrage of the California New Car Dealers Association.
The group alleged that Volvo, by offering subscriptions directly through its website, violated state laws intended to prohibit manufacturers from competing with franchisees.
In January 2019, the association filed a petition with the state’s New Motor Vehicle Board claiming the legality of Care By Volvo. In August, the board directed the state DMV to investigate.
“Volvo is misleading consumers by saying it’s a subscription program. It’s actually a lease,” Maas said. car news 2020.
At the time, the association asked Volvo to “immediately suspend” its subscription program in California. It also asked the California New Automobile Commission to take disciplinary action against Volvo, including financial penalties.
A six-month investigation by the California Department of Motor Vehicles, which ended in 2020, sided with dealers. It turns out that Volvo should have been properly notified of the relevant changes to its franchise agreements and offered preferential treatment when allocating subscription cars to factory-controlled stores.
The DMV also concluded that Volvo provided improper lease disclosures to subscription customers. The agency warned Volvo that future violations could lead to “enforcement action”, but did not go so far as to take punitive action.
Shortly thereafter, Volvo terminated its subscription program in California.