Car Subscription Services Promise Consumers Automotive Variety

There is a new alternative to vehicle ownership – a car subscription service. Several major manufacturers and third-party companies now offer such services. These services may cost a little more per month than a lease or financing payment, but most services include maintenance and insurance while covering the cost of repairs, and it’s usually possible to swap out the current car for a different one.

There are a few significant differences between the manufacturers’ programs and the third-party services. The most obvious is that carmakers’ services limit users to that particular brand, whereas the third-party ones allow access to a myriad of different brands. The well-known Zipcar service owns the vehicles and allows consumers to access a range of different cars. Services like Getaround and Turo put a spin on the model by adopting an “Airbnb for cars” model, letting users borrow the cars of real people. Even within manufacturer services, there is a bit of variety. Car2Go and Maven, including others, are car-sharing services that specific manufacturers operate but this is not reflected in the company name. These operate like Zipcar but are limited to one brand. Some services charge a flat monthly fee, while others have fees that vary by car and location.

Outside of a major city, choice could be limited. Manufacturer services are often only available in certain cities, because of the difficulty of procuring a consistent vehicle lineup for members. Subscribers paying thousands of dollars per month would be annoyed, for example, if they couldn’t use a specific model on their plan because the local dealerships were out.

While some services are aimed at urban dwellers who occasionally need a car or at people who might need to borrow a truck or SUV for moving, others promise a more luxury approach, allowing members to switch off between luxury and high-performance models. BMW recently launched a pilot “Access by BMW” program in Nashville, TN that lets members swap one BMW vehicle for another through a mobile app. For a monthly payment (which includes insurance, maintenance, and roadside assistance), members get unrestricted access to a select portfolio of BMW vehicles.

Subscribers can vary their vehicle selection depending on their usage or activity needs. There is no limit to the number of times members can switch vehicles within a given month. After a customer requests a vehicle, a BMW concierge will deliver the vehicle (already fully-fueled and with the member’s personal preferences pre-set) to the member’s location at the desired time. BMW’s service costs $2,000 per month for a lower tier of cars, and $3,700 for higher-end models, including the $100,000 BMW M5. Porsche operates a “Passport by Porsche” program that is similar to BMW’s, and costs $2,000 or $3,000 per month depending on what cars customers desire. Porsche’s higher-tier plan includes the $100,000 911 Carrera Cabriolet.

Volvo is also getting into the subscription business. Volvo has a program in place with its new “Care by Volvo” subscription, available for the XC40. According to Volvo, the subscription plan starts at $600 a month. That may sound steep for a small premium crossover, but that dollar figure includes insurance, concierge service, roadside assistance and all maintenance, right down to allowances for wheel and tire damage, not to mention wear items like tires, wipers, and brakes.

Program terms include a 24-month duration and 15,000 miles per year, and customers will have the option to change vehicles and sign on to a new 24-month term after 12 months. There is no down payment. Volvo’s upcoming electric sports car, the Polestar 1, was originally slated to be available only through subscription (which would have been a first for a major carmaker) but Volvo eventually backtracked and made it clear that consumers could buy the car if they wished.

At the very top-end of the market are private “clubs” that allow members to drive a range of exotic cars, for very high fees. The Classic Car Club of Manhattan allows access to cars including the Ferrari 458 Spider, Acura NSX, and Lamborghinin Huracan. Their service charges range from $5,000 to $15,000 up front (with $180 monthly fees). Washington, D.C.’s Drive Society ranges from $2,000 to $1,200 and includes cars such as the Porsche Cayman GT4, Ferrari 458, and Tesla Roadster. Both services work on a “point system” where members are paying for points that are then used to use the car of their choice.

There are now automotive start-ups that seek to base their whole business model on car sharing. Lynk & Co, a Chinese-Swedish company owned by Volvo parent company Geely, unveiled its 02 Suv based on Volvo’s XC40 SUV that will be offered 02 through a subscription model.

With motorists’ increasing acceptance of car sharing and shifting attitudes towards car ownership, automakers and independent entrepreneurs alike are viewing subscription-based car models as an opportunity. Only a handful of brands have dipped their toes in the pool, but more are likely to join.

Photo by Mikes Photos from Pexels, License Summary.

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