GM Makes $1,500 OnStar Subscription Mandatory on GMC, Buick, Cadillac Models
Remember how GM said it was gonna make billions on subscriptions? This is how.
If you don't want to pay for in-car subscriptions every month, no problem: Just pay it all upfront. That's the line from General Motors today after news spread that it's making a three-year, $1,500 OnStar connected services subscription a mandatory "option" for new Buick, GMC, and Cadillac Escalade models. The subscription, which enables things like using your phone as a key fob, data-enabled navigation, audio streaming, and Amazon's Alexa virtual assistant, is still optional on other GM vehicles, with the Premium package running $49.99 a month. But don't be surprised if this new setup spreads across the automaker's full portfolio.
Though it's getting attention today following a Detroit Free Press report, the news of Onstar becoming a mandatory subscription was first reported back on July 5 by GM Authority. The $1,500 charge for OnStar will effectively raise the base prices of these cars, though the exact increase varies by model. All Buicks will see a price increase of $1,500. Higher trim GMCs will see an increase of as little as $905 with the Hummer EV getting no MSRP boost. Base model GMC pickups, the Sierra and Canyon, are hit the hardest with a $1,675 increase. By far the most common price hike is $1,500, which also applies to the Cadillac Escalade, Automotive News reports.
Speaking to GM Authority, a spokesperson said making customers pay for the service will "enhance [their] vehicle ownership experience... By including this plan as standard equipment on the vehicle, it provides more customer value and a more seamless onboarding experience." The automaker confirmed to AN that buyers who don't activate OnStar and have no desire to use the services will not be offered a discount.
The way this change rolled out is a pretty classic GM forced error. Dealer markups aside, new car prices are somewhat insulated from rapid inflation because they're typically set in annual increments as each new model year comes out. We are now getting into the 2023 lineup launch season, and we are already seeing some hefty price jumps to account for increased supply chain costs. GM could've raised all those MSRPs, pinned it on inflation, and offered a free three-year OnStar subscription to soften the blow.
Instead, it's thrown itself into the melee that is consumers raging about subscription options on new cars with this mandatory option nonsense. It's not as bad as trying to paywall things like heated seats, as BMW found out recently, nor is it as convoluted as Toyota's plan to turn its key fob remote start function into a subscription service. But the idea that buyers are forced to pay for something they may not want that was previously an optional subscription is undoubtedly going to raise concerns. And the whole thing feels a bit Orwellian when GM insists on still calling it an "option" being "offered."
We reached out to GM to ask whether this mandatory subscription model is headed to Chevrolet and other Cadillacs next, and a spokesperson responded by saying the plan "is being offered on new Buick, GMC, and Cadillac Escalades at this time."
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