TSLA362.86017.73%
GM87.9301.78%
F14.4100.42%
RIVN16.9700.96%
CYD39.8801.17%
HMC33.3700.77%
TM197.3505.11%
CVNA69.880-1.64%
PAG216.8700.32%
LAD370.7300.06%
AN199.490-0.6%
GPI261.850-1.97%
ABG214.810-0.56%
SAH77.450-0.33%
TSLA362.86017.73%
GM87.9301.78%
F14.4100.42%
RIVN16.9700.96%
CYD39.8801.17%
HMC33.3700.77%
TM197.3505.11%
CVNA69.880-1.64%
PAG216.8700.32%
LAD370.7300.06%
AN199.490-0.6%
GPI261.850-1.97%
ABG214.810-0.56%
SAH77.450-0.33%
TSLA362.86017.73%
GM87.9301.78%
F14.4100.42%
RIVN16.9700.96%
CYD39.8801.17%
HMC33.3700.77%
TM197.3505.11%
CVNA69.880-1.64%
PAG216.8700.32%
LAD370.7300.06%
AN199.490-0.6%
GPI261.850-1.97%
ABG214.810-0.56%
SAH77.450-0.33%

Court rejects dealer challenge to Volvo’s prepaid maintenance reimbursement rates

A Massachusetts court confirms Volvo dealerships can opt out of prepaid maintenance plans without breaking franchise rules.
Volvo prepaid maintenance program

A federal court in Massachusetts ruled that selling and servicing under Volvo Cars USA’s branded prepaid maintenance program isn’t part of dealerships’ franchise obligations.

The Plaintiffs, two Volvo dealerships in Hyannis and Plymouth argued that their reimbursements fell short of their usual service charges. They claimed that this practice violated state law, which mandates that manufacturers pay dealers fairly for their work.

Volvo Car U.S., Volvo Car Financial Services, and Fidelity Warranty Services were the defendants.

The automaker’s prepaid maintenance program lets customers pay beforehand to lock in discounted rates for inevitable services like oil changes and tire rotations. However, the program isn’t run directly by the manufacturer and is handled by Fidelity. Dealerships decide how much they want to charge for these plans by picking a “tier” that sets how much they get paid for the work. When dealerships pick a higher tier, they receive more per job but must pay Fidelity a larger fee per contract sold.

Volvo Car argues that it does not need to reimburse dealerships at the retail labor rate for work covered by the maintenance plan because Volvo Financial Services and Fidelity offer the program.

The courts rejected the dealerships’ argument, ruling in favor of the Defendants, stating that Volvo doesn’t require selling the prepaid plans and that the state law doesn’t apply.

The court clarified that dealerships may face commercial pressure from Volvo to promote the program, but this doesn’t create a legal obligation to participate. It was noted that while many dealerships choose to sell these plans, at least 19 of the 281 authorized Volvo dealerships nationwide have opted out, demonstrating that participation is voluntary. This decision underscores the distinction between optional business opportunities and contractual franchise requirements, emphasizing that Volvo’s prepaid maintenance program falls into the former category.

Read More
More from Articles
Carvana's latest acquisition outside Cleveland marks its seventh Stellantis franchise in just over a year. CDJR

Carvana’s new-vehicle sales surge as online model challenges traditional CDJR dealers

- August 21, 2026
On the Dash: Carvana is effectively expanding the reach of its CDJR dealerships by shipping new vehicles to buyers far beyond their local markets. Traditional dealers can compete by making...
Joe Ghaben acquires Genesis of Glenview in Illinois

Joe Ghaben acquires Genesis of Glenview in Illinois

- August 21, 2026
Joe Ghaben and Ghaben Auto Group have acquired Genesis of Glenview, Illinois, from an undisclosed seller. The transaction was announced August 19, 2026, with Performance Brokerage Services serving as the...
Foundation Automotive 'insolvent' after losing $5 million judgment appeal

Foundation Automotive ‘insolvent’ after losing $5 million judgment appeal

- August 21, 2026
On the Dash: Foundation Automotive's CFO told a North Dakota court the company is insolvent, and creditor HPS Investment Partners has taken control of its board. The U.S. Court of...
CARFAX: Which Vehicles are the Most Reliable?

CARFAX: Which vehicles are the most reliable?

- August 21, 2026
CENTREVILLE, Va., Aug. 17, 2026 /PRNewswire/ -- CARFAX has compiled a ranking of the most reliable vehicle types based on billions of records from across the country. On the CARFAX Vehicle Research Pages, future Reliability uses year,...
CBT News
Privacy Overview

This website uses cookies so that we can provide you with the best user experience possible. Cookie information is stored in your browser and performs functions such as recognising you when you return to our website and helping our team to understand which sections of the website you find most interesting and useful.