Indiana lawmakers may put brakes on auto subscription services

A long line of unsold 2018 Sonatas sits outside a Hyundai dealership Oct. 6, 2017, in the south Denver suburb of Littleton, Colo. (AP Photo/David Zalubowski)

INDIANAPOLIS (WISH) — A new car service sweeping the nation is worrying Indiana auto dealerships.

So, Hoosier lawmakers are stepping in to address automotive subscription services. You pay a car manufacturer a flat fee every month to drive a new car every 30 days in certain cities.

Carmakers call it a money-saver, but some Indiana auto dealers worry it could spell disaster.

J.D. Power, a market research company, says Hyundai has a subscription service for $275 a month in California. Volvo will have one for $600 a month. J.D. Power said Cadillac’s program starts at $1,800 a month.

Chatting with 24-Hour News 8 on Monument Circle about the subscription service, Madyson Piper, of Marcellus, Michigan, said, “Yeah, that’s a lot of money. I literally pay that much money for tuition a month.”

Matt Bell with the Automobile Dealers Association of Indiana said dealers are watching the trend with a high-beam focus.

Bell said, “We’re concerned with where the role of the Indiana auto dealer is in that relationship. It’s the dealer that the customer is used to interacting with.”

The worry, Bell said, is the dealerships would be driven out of the equation and potential jobs would disappear.

“Where do the 25,000 folks employed by 432 auto dealers fit in that equation?” Bell asked. “We want to make sure they do fit. We want to make sure there’s a local connection.”

Which is where State Rep. Ed Soliday’s bill comes in. Already overwhelmingly approved in the House, Bell said the bill, in part, would let lawmakers put the brakes on these services coming to Indiana.

“We take time out. Say what does this really mean? How does it work in relation to the Indiana consumer? How do we make sure their needs are served? And study that before that model is prevalent and rolled out across the state,” Bell said.

A service some people don’t seem to have much of an opinion on.

“It’s a car rental!”¬†Daisy Ciudadreal, of California, said while visiting Monument Circle.

The bill is assigned to the Senate Homeland Security and Transportation Committee, but a hearing date isn’t set yet.