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Greedy US Dealerships Already Want To Stop Subscription Services

Aug. 20, 2018 11:40 AM ET by Jared Rosenholtz / 12 Comments As per usual, US dealerships want their cut. Car dealerships have tremendous power in the United States. Unlike almost any other product, new cars can only be purchased from authorized dealers, not from the manufacturers themselves. Tesla is one of the lone exceptions with its direct to consumer model, though it has difficulty in some US states. US dealerships have a knack for getting what they want - you know that dreaded 25-year limit on importing foreign vehicles? Blame dealerships for it. Now, these dealerships are starting to feel threatened by new subscription services. This new model is being implemented by automakers like Cadillac, Lexus, Mercedes, Porsche, and Volvo at the corporate level, but Automotive News reports that the local dealers are feeling left out of the equation. Volvo Cars of North America One of the first subscriptions to be revealed was Care by Volvo, which would allow users to subscribe to an XC40 starting at $600 per month including insurance and maintenance. The big issue here is that customers can sign up for subscriptions like Care by Volvo on a website or app without having to go through a dealership. Some states are claiming that these services violate their dealer franchise laws and temporary bans have already been placed in Indiana and California. New Jersey dealerships are also seeking regulatory changes to ensure they aren't left out of the business stream. Volvo Dealerships are feeling threatened because these subscription services offer an easy, no-haggle method for buying a car that could potentially hurt their revenue stream. Service like Care by Volvo currently work with local dealerships to deliver the car and compensate the dealership with a payment as well as any service performed at the dealership. This seems like a fair process, but dealers are afraid that automakers could cut the compensation at any time. The whole issue is deeply complicated but we can boil it down to a simple theme - this is just another example of US dealerships trying to retain control and ensuring that the process of buying a new car continues to suck for everyone. Volvo Volvo Volvo Cadillac

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Volvo XC40 Jared Rosenholtz Editor-at-Large After graduating with an MBA, Jared pursued his love of cars by becoming an automotive journalist. An internship with CarBuzz grew into his current position as Editor At Large. Jared now spends most of his time evaluating new vehicles and chasing the latest news stories in the automotive industry. When he’s not attending Cars & Coffee events on the weekend, Jared loves to watch NFL football and cruise around with the top down in his German convertible. Contact Jared @Carsnbites @jar_rosenholtz LoginSign Up Home News Features Car Reviews Car Advice 2021 CarBuzz Awards New Cars Used Cars Future Cars Compare Cars Sell My Car Car Dealerships Buy Here Pay Here Used Car Reviews Popular Tags Cars # Video # TOP # Spy Shots # Reveal # Rumor # Auto Show # Supercar # Tuning # Car Culture # Industry News # Motorsport Acura Alfa Romeo Aston Martin Audi Bentley BMW Bollinger Bugatti Buick Cadillac Caterham Chevrolet Chrysler Dodge Ferrari Fiat Fisker Ford Genesis GMC Hennessey Honda Hyundai Infiniti Jaguar Jeep Karma Kia Koenigsegg Lamborghini Land Rover Lexus Lincoln Lordstown Lotus Lucid Motors Maserati Mazda McLaren Mercedes-Benz Mini Mitsubishi Nissan Pagani Polestar Porsche Ram Rimac Rivian Rolls-Royce Spyker Subaru Tesla Toyota Volkswagen Volvo By Make Acura Alfa Romeo Aston Martin Audi Bentley BMW Bollinger Bugatti Buick Cadillac Caterham Chevrolet Chrysler Dodge Ferrari Fiat Fisker Ford Genesis GMC Hennessey Honda Hyundai Infiniti Jaguar Jeep Karma Kia Koenigsegg Lamborghini Land Rover Lexus Lincoln Lordstown Lotus Lucid Motors Maserati Mazda McLaren Mercedes-Benz Mini Mitsubishi Nissan Pagani Polestar Porsche Ram Rimac Rivian Rolls-Royce Spyker Subaru Tesla Toyota Volkswagen Volvo By Car Type SUVs Crossovers Sedans Coupes Trucks Sports Cars Wagons Vans Hatchbacks Convertibles Small Cars Luxury Cars Electric Cars Hybrid Cars Future Cars By Price Up to $15K $15K - $25K $25K - $35K $35K - $45K $45K - $55K $55K - $75K $75K - $100K $100K - $200K $200K - $300K Above $300K Back To Top