BILL NUMBER: S5708
SPONSOR: SKOUFIS
 
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 the 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 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 essential 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:
Senate
2023: N/A
2024: S8393B, Advanced to Third Reading
Assembly
2023: N/A
2024: A9062B, Passed Assembly
 
FISCAL IMPLICATIONS:
None.
 
EFFECTIVE DATE:
This act shall take effect on the ninetieth day after it shall have
become a law. Effective immediately, the addition, amendment and/or
repeal of any rule or regulation necessary for the implementation of
this act on its effective date are authorized to be made and completed
on or before such effective date.