HB 2462: Consumer Protection; Motor Vehicles; Subscriptions; Penalties

A BILL FOR AN ACT

relating to consumer protection.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

     SECTION 1.  The legislature finds that consumers have traditionally understood the purchase or lease of a motor vehicle to include ownership or use of the physical features and functions installed on that vehicle at the time of sale.  For generations, when consumers paid for goods— such as appliances, tools, or vehicles— they reasonably expected to own and use the included features without being subject to ongoing fees.

     The legislature further finds that, in recent years, manufacturers across multiple industries have increasingly adopted business models that convert formerly owned goods into subscription-based services.  This practice has expanded beyond the digital content and services into physical products, including motor vehicles, where consumers are charged recurring fees to access features that rely on hardware already installed in the product and for which the consumer has already paid. 

     The legislature finds that this proliferation of post-sale subscription fees undermines consumer expectations, erodes the concept of ownership, and shifts economic risk and cost onto consumers without providing corresponding ongoing value.  In the context of motor vehicles, these practices can result in consumers paying repeatedly for basic convenience or safety features— such as heated seats or other vehicle functions— that would otherwise operate without any continuing cost or service.  

     The legislature further finds that these subscription-based restrictions are often not clearly disclosed at the point of sale, leaving consumers unaware that features advertised as part of the vehicle may be disabled or withheld unless additional recurring payments are made.  Such practices can be misleading, reduce price transparency, and limit consumers' ability to make informed purchasing decisions.

     The legislature recognizes that while subscription services are appropriate and justified for features that require ongoing data connectivity, third-party services, or continuous operational support, it is neither fair nor reasonable to require consumers to pay recurring fees for the use of hardware and functionality already installed and fully capable of operating without ongoing cost. 

     Accordingly, the purpose of this Act is to protect consumers from unfair and deceptive subscription practices, preserve reasonable expectations of ownership, promote transparency at the point of sale, and ensure that consumers are not required to repeatedly pay for features they have already purchased as part of their motor vehicle. 

     SECTION 2.  Chapter 481B, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

     "§481B-    Vehicle feature subscriptions.  (a)  As used in this section:

     "Consumer" means the purchaser, or lessee, other than for the purposes of resale, of a motor vehicle.

     "Dealer" shall have the same meaning as such term is defined by section 437-1.1.

     "Manufacturer" means a person or business engaged in the manufacturing or assembling of new motor vehicles.

     "Motor vehicle feature" means any convenience or safety function included on the motor vehicle, including but not limited to heated seats that typically is offered to a consumer as an upgrade at the time of purchase or lease of the motor vehicle.

     "Subscription service" means a service provided on a subscription basis in exchange for a recurring payment, including, but not limited to, a weekly, monthly, or annual payment charged to and made by a consumer but shall not include a consumer's reoccurring payment made pursuant to a retail installment contract or lease contract for the purchase or lease of a motor vehicle.

     (b)  No manufacturer, dealer, or agent of a manufacturer or dealer shall offer to a consumer a subscription service for any motor vehicle feature that:

     (1)  Utilizes components and hardware already installed on the motor vehicle at the time of purchase or lease by the consumer; and

     (2)  Is capable of functioning based solely on hardware and software already installed on the motor vehicle at the time of purchase or lease, without reliance on external data networks or third-party services.

     (c)  The provisions of this section shall not:

     (1)  Apply to navigation system updates, infotainment features, satellite radio, in-vehicle WI-FI, telematics services, roadside assistance, software-dependent driver assistance or driver automation features, or vehicle-connected services that rely on cellular or other data networks for continue operation; or

     (2)  Be construed to prohibit a dealer or manufacturer from providing any software update to the consumer, provided the dealer or manufacturer does not charge the consumer a fee for any software update remedying a safety-related defect that is required to be provided to the consumer at no cost as required by title 49 Code of Federal Regulations section 573.6.

     (d)  Penalties for a violation of this section shall be assessed according to the following:

     (1)  Any manufacturer, dealer, or agent of a manufacturer or dealer that violates this section shall be subject to a civil penalty or not less than $1,000 per violation;

     (2)  Each motor vehicle sold or leased in violation of this section shall constitute a separate violation;

     (3)  For a second or subsequent violation, the civil penalty shall be not less than $5,000;

     (4)  Civil penalties imposed under this section shall be in addition to any other remedies or penalties available under law; and

     (5)  In addition to civil penalties, the enforcing authority may order restitution of any subscription fees improperly charged to consumers.

     (e)  The following disclosure requirements shall apply to this section:

     (1)  Prior to the completion of a motor vehicle sale or lease, a manufacturer or dealer shall provide the consumer with a clear and conspicuous written disclosure identifying:

          (A)  Each motor vehicle feature included on the vehicle that requires a subscription service for activation or continued use;

          (B)  Whether the feature relies on hardware already installed on the motor vehicle at the time of purchase or lease;

          (C)  The cost of any required subscription service, including the amount and frequency of recurring charges; and

          (D)  Whether the feature will be disabled, limited, or unavailable if the consumer does not purchase or renew the subscription service;

     (2)  The disclosure required under this subsection shall be provided:

          (A)  As a standalone document separate from the retail installment contract or lease agreement;

          (B)  In plain language in a font size and format reasonably calculated to be noticed and understood by a consumer; and

          (C)  Shall also be included on the vehicle's window sticker or Monroney label, if applicable; and

     (3)  A manufacturer or dealer shall not represent that a motor vehicle feature is included in the purchase or lease price of the vehicle if the feature requires a subscription service for activation or continued use, unless the disclosure required under this subsection is provided.

     (4)  Failure to provide the disclosure required under this subsection shall constitute a violation of this section and shall be subject to the civil penalties provided in subsection (d)."

     SECTION 2.  This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.

     SECTION 3.  New statutory material is underscored.

     SECTION 4.  This Act shall take effect on July 1, 2026.

Report Title:

Consumer Protection; Motor Vehicles; Subscriptions; Penalties

Description:

Prohibits auto manufacturers and dealers from charging a post-sale subscription fee for hardware that is already installed at the time of purchase.  Establishes penalties and fines.

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.