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.

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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.”