Prohibits motor vehicle manufacturers and dealers from charging a subscription fee for certain functions of a motor vehicle after the vehicle is sold; provides that any manufacturer, dealer, or agent of a manufacturer or dealer that fails to comply with such requirements shall be assessed a civil penalty not to exceed two hundred fifty dollars per point of sale for each violation.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A9062B
SPONSOR: Magnarelli TITLE OF BILL:
An act to amend the general business law, in relation to prohibiting
motor vehicle manufacturers and dealers from charging a subscription fee
for certain functions of a motor vehicle after the vehicle is sold
PURPOSE:
To prohibit motor vehicle dealers and manufacturers from charging
subscription fees for features currently installed in the vehicle at
time of purchase.
SUMMARY OF PROVISIONS:
Section 1: Stipulates that no manufacturer, dealer, or agent of a
manufacturer or dealer can offer to a consumer a subscription service or
charge a post-purchase fee for any motor vehicle feature that:
1) uses components and hardware already installed on the vehicle at time
of purchase, or
2) functions after activation without ongoing cost to the dealer,
manufacturer, or any third-party service provider.
This section does not prohibit a dealer or manufacturer from producing
any software update to a consumer as long as the software update does
not remedy a safety-related defect that is required to be provided to
the consumer.
It also provides exclusions for certain software-based features offered
by manufacturers and third parties, such as: navigation system updates,
infotainment features, satellite radio and in-vehicle WiFi.
Finally, it ensures that manufacturers and dealers cannot charge for
software-based safety recall repairs.
Section 2: Sets the effective date.
JUSTIFICATION:
Car companies are increasingly charging consumers a subscription fee to
access certain features on their vehicles, such as heated seats, enter-
tainment options, enhanced navigation, and hands-free driving, even
though the components necessary for such features to function are
already installed on the vehicle at the time of sale.
The New York Post reported that BMW recently began charging car owners
in several countries $18 per month to turn on their heated seats. In
September of 2023, Axios reported that Ford recently announced new
options for accessing its top-rated BlueCruise hands-free highway driv-
ing technology; buyers can activate BlueCruise at the time of purchase
for three years by rolling the $2,100 cost into the financing or they
can activate it later for $800 a year or $75 a month. Toyota and General
Motors are also making similar moves, with GM telling investors it aims
to generate a significant amount of profit from charging these
subscription fees.
During this time of rising consumer prices, it is important to guard
against these business practices that hurt New York consumers. By
restricting the offering of subscription services or post-purchase fees
for features that do not present an ongoing expense for dealers or
manufacturers, this bill seeks to enhance transparency in pricing for
consumers. This bill aims to establish clear rules, prevent exploitative
practices as vehicles become more technologically advanced, and prevent
post-purchase fees as a future automotive business model.
LEGISLATIVE HISTORY:
New Bill.
FISCAL IMPLICATIONS:
None.
EFFECTIVE DATE:
This act shall take effect on the ninetieth day after it shall have
become a law.
STATE OF NEW YORK
________________________________________________________________________
9062--B
IN ASSEMBLY
February 6, 2024
___________
Introduced by M. of A. MAGNARELLI, GLICK, GUNTHER, LAVINE, THIELE,
BURDICK, WEPRIN, EPSTEIN, SANTABARBARA, DAVILA, LEVENBERG, STECK,
BURGOS, ARDILA -- Multi-Sponsored by -- M. of A. WOERNER -- read once
and referred to the Committee on Consumer Affairs and Protection --
committee discharged, bill amended, ordered reprinted as amended and
recommitted to said committee -- reported and referred to the Commit-
tee on Codes -- reported and referred to the Committee on Rules --
Rules Committee discharged, bill amended, ordered reprinted as amended
and recommitted to the Committee on Rules
AN ACT to amend the general business law, in relation to prohibiting
motor vehicle manufacturers and dealers from charging a subscription
fee for certain functions of a motor vehicle after the vehicle is sold
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. The general business law is amended by adding a new section
2 198-d to read as follows:
3 § 198-d. Vehicle feature subscriptions. (a) As used in this section:
4 (1) "Consumer" shall mean the purchaser, or lessee, other than for
5 purposes of resale, of a motor vehicle.
6 (2) "Dealer" shall have the same meaning as such term is defined by
7 section four hundred fifteen of the vehicle and traffic law.
8 (3) "Manufacturer" shall mean a person or business engaged in the
9 manufacturing or assembling of new motor vehicles.
10 (4) "Motor vehicle" shall have the same meaning as such term is
11 defined by section one hundred twenty-five of the vehicle and traffic
12 law.
13 (5) "Motor vehicle feature" shall mean any convenience or safety func-
14 tion included on the motor vehicle, including but not limited to heated
15 seats that typically is offered to a consumer as an upgrade at the time
16 of purchase or lease of the motor vehicle.
17 (6) "Subscription service" shall mean a service provided on a
18 subscription basis in exchange for a recurring payment, including, but
19 not limited to, a weekly, monthly, or annual payment charged to and made
20 by a consumer but shall not include a consumer's reoccurring payment
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD13200-05-4
A. 9062--B 2
1 made pursuant to a retail installment contract or lease contract for the
2 purchase or lease of a motor vehicle.
3 (b) No manufacturer, dealer, or agent of a manufacturer or dealer
4 shall offer to a consumer a subscription service for any motor vehicle
5 feature that:
6 (1) utilizes components and hardware already installed on the motor
7 vehicle at the time of purchase or lease by the consumer; and
8 (2) would function after activation without ongoing cost to or support
9 by the dealer, manufacturer, or any third-party service provider.
10 (c) The provisions of this section shall not:
11 (1) apply to navigation system updates, infotainment features, satel-
12 lite radio, in-vehicle Wi-Fi, telematics services, roadside assistance,
13 software-dependent driver assistance or driver automation features, or
14 vehicle-connected services that rely on cellular or other data networks
15 for continued operation; or
16 (2) be construed to prohibit a dealer or manufacturer from providing
17 any software update to a consumer, provided the dealer or manufacturer
18 does not charge the consumer a fee for any software update remedying a
19 safety-related defect that is required to be provided to the consumer at
20 no cost as required by Section 573.6 of Title 49 of the United States
21 Code.
22 (d) Any manufacturer, dealer, or agent of a manufacturer or dealer
23 that fails to comply with the requirements of this section shall be
24 assessed a civil penalty not to exceed two hundred fifty dollars per
25 point of sale for each violation.
26 § 2. This act shall take effect on the ninetieth day after it shall
27 have become a law. Effective immediately, the addition, amendment and/or
28 repeal of any rule or regulation necessary for the implementation of
29 this act on its effective date are authorized to be made and completed
30 on or before such effective date.
