For Vehicular Ad-Hoc Network (VANET) location services, scalability toward the extensive network scale and high mobility of vehicles is a key issue. Furthermore, minimization of signaling overhead is another important issue for emerging applications such as IoV (Internet of vehicles) which require frequent and continuous collection of location information. Some of the VANET location service mechanisms solely rely on per-vehicle server assignment and location updates, and thus, impose heavy server maintenance complexity and/or signaling overhead. On the other hand, there exist mechanisms that perform aggregated location updates based on hierarchical architecture. The legacy mechanisms with aggregated location update, though, either suffer lack of service reliability or cannot take full advantage of the location update aggregation in reducing the location update overhead. Accordingly, we propose a dynamic Mobile Group-based Location Service (MoGLS), a scalable VANET location service, which is robust to the mobility in terms of both reliability and overhead. MoGLS is based on a hierarchical structure of servers. The lower level is composed of dynamic groups of vehicles with similar trajectories, and one of the vehicles in each group takes the role of lower level location server. Higher level is comprised of the unit areas with an infrastructure-based fixed server. For the location update from the lower to the higher level server, aggregation of information is applied. By the leverage of characteristics that lower level servers move together with their member vehicles, mechanisms to prevent the deterioration of service reliability due to aggregated location update are proposed while taking full advantage of the aggregated location update in reducing the signaling overhead. MoGLS includes dynamic group management, location update and discovery, and a group merge algorithm for the optimal group formation. Through the performance comparisons via simulation, it is shown that MoGLS provides satisfactory service reliability with smaller signaling overhead compared to the existing hierarchical VANET location service mechanisms with aggregated location update. Furthermore, the performance of MoGLS is shown to be more stable toward the increase of density and speed of vehicles.