NJ proposal to ban subscriptions for features already built into cars
Updated on Nov. 16, 2022
TRENTON – Legislation endorsed by an Assembly committee would ban car manufacturers and dealers from offering in-car subscriptions for features already built into the vehicle.
The bill – A4519 – would not apply to any third-party service providers of features such as SiriusXM satellite radio or in-car Wi-Fi.
Rather it focuses on components and hardware already installed on the car that would function after activation without any ongoing expense, such as convenience or safety functions offered as an upgrade to consumers such as heated seats, remote starting or driver assistance.
Services such as OnStar would seemingly be permitted, as there is an ongoing expense associated with that.
The bill, which is sponsored by Assemblyman Paul Moriarty, D-Gloucester, joined by Assemblyman Joe Danielsen, D-Somerset, says car companies are increasingly seeking to charge weekly, monthly or annual fees for subscriptions for features that are already part of the vehicle, then activated remotely.
“If you have outfitted my car with four-wheel drive that I shouldn’t have to pay you to activate it," Moriarty said. "It’s already there. You put it in there. I paid for the car. Cruise control – it’s in the car.”
Moriarty said this isn’t an isolated trend, pointing to a Kelley Blue Book article that says General Motors told investors it plans to add around 50 subscription services by 2026.
Moriarty added that “during this time of rising consumer prices, it is important to guard against business practices that primarily serve to increase corporate profits.” And he said it's not limited to cars, noting some people pay monthly for their Ring doorbells.
“Where does it go? Does it go to a portion of my refrigerator doesn’t work unless I pay a monthly fee to make the crisper work?” Moriarty said. "... How many components am I going to be paying a monthly fee for."
A violation of the bill would trigger the state’s consumer fraud act and be punishable by a penalty of up to $10,000 for a first offense and up to $20,000 for any subsequent offense. In addition, violations may result in cease-and-desist orders issued by the state attorney general, punitive damages and the awarding of treble damages and costs to an injured party.
Scot Mackey, a lobbyist for the Alliance for Automotive Innovation, said such services aren’t imminent but that car companies don’t want to be blocked from introducing them later.
He said cars are technologically advanced and changing regularly, with products being worked on now that won’t be sold for five to seven years.
“We’re not sure what the future holds. We’d like this to be one thing that might be able to be used down the road," Mackey said. "I don’t know what it’s going to be. Nobody has any plans right now, I can tell you, to do anything subscription oriented.”
Moriarty is the chairman of the Assembly Consumer Affairs Committee, which endorsed the bill at its Nov. 14 hearing. It was then sent to the Assembly Commerce and Economic Development Committee for further consideration.