Volvo Car USA’s vehicle subscription program violates several California franchise and consumer protection laws, according to a six-month investigation by the state’s Department of Motor Vehicles.
In a letter dated April 28, the department warned Volvo that future violations might lead to “enforcement actions” but stopped short of taking any punitive steps now.
The California DMV probe escalates a two-year battle between Volvo and its California dealers over the subscription service and questions the future of a key Volvo retail program in the Swedish automaker’s largest U.S. market.
Volvo views the subscription program as another channel for dealers to move inventory. Just as with traditional new-vehicle leases and sales, dealers receive a margin on subscription volume.
Care by Volvo, launched in 2017, is a two-year subscription service. The program bundles the use of a vehicle, insurance and maintenance costs into a monthly payment that ranges from $700 to $800, depending on the…