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: A9062A
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 expense 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.
The section also stipulates that violations are punishable by a fine of
up to two hundred fifty dollars per point of sale for each violation.
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--A
IN ASSEMBLY
February 6, 2024
___________
Introduced by M. of A. MAGNARELLI, GLICK, GUNTHER, LAVINE, THIELE,
BURDICK, WEPRIN, EPSTEIN, SANTABARBARA, DAVILA, LEVENBERG, STECK --
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
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 or driver assistance, that typically is offered to a consumer as
16 an upgrade at the time 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 third-party services, such as info-
21 tainment features, satellite radio, or in-vehicle Wi-Fi.
22 (b) No manufacturer, dealer, or agent of a manufacturer or dealer
23 shall offer to a consumer a subscription service or charge a post-pur-
24 chase fee for any motor vehicle feature that:
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD13200-03-4
A. 9062--A 2
1 (1) utilizes components and hardware already installed on the motor
2 vehicle at the time of purchase or lease by the consumer; and
3 (2) would function after activation without ongoing expense to the
4 dealer, manufacturer, or any third-party service provider.
5 (c) The provisions of this section shall not be construed to prohibit
6 a dealer or manufacturer from providing any software update to a consum-
7 er, provided the dealer or manufacturer does not charge the consumer a
8 fee for any software update remedying a safety-related defect that is
9 required to be provided to the consumer at no cost.
10 (d) Any manufacturer, dealer, or agent of a manufacturer or dealer
11 that fails to comply with the requirements of this section shall be
12 assessed a civil penalty not to exceed two hundred fifty dollars per
13 point of sale for each violation.
14 § 2. This act shall take effect on the ninetieth day after it shall
15 have become a law. Effective immediately, the addition, amendment and/or
16 repeal of any rule or regulation necessary for the implementation of
17 this act on its effective date are authorized to be made and completed
18 on or before such effective date.
