Mercedes Benz

Automakers and retailers experimenting with vehicle subscription programs face a big "What if?" State legislatures now have regulation of the programs on their radar screens, and a new state law could torpedo how and even whether subscription plans can be offered. Case in point: Vehicle subscription plans are a no-go in the state of Indiana right now under a moratorium that lasts until May 1, 2019. No doubt there are some oversight matters that need to be cleared up. For instance, how should registration and license plates for subscription vehicles be handled? Some parties in New Jersey are exploring special plates that would give subscription program operators more flexibility in the vehicles they put into service and help them avoid rental car fees charged in the state. But perhaps the core issue is the age-old tension around direct sales by automakers. Some of the subscription pilots launched by manufacturers did not have specific roles for the dealerships retailing their ...

With vehicle subscription plans such as Book by Cadillac and Care by Volvo gaining momentum and clientele, some states are scrutinizing the models and their implications for dealership franchise laws and state revenue streams. It has led to a temporary ban on subscription programs in Indiana and an on-hold proposal in California that would have required that any automaker subscription plan go through its dealers. They are among the first states to look at how to treat vehicles in the growing number of subscription programs offered by manufacturers and dealers — or even whether regulation of the programs is necessary. New Jersey dealers also are seeking regulatory changes. Dealers want to make sure they're not left out of a new business stream and that their margins are protected for the long run, while automakers want to be able to offer mobility services and advanced technology to consumers absent new and complicated statutes and regulation. The differences in opinion could lead m...