Vehicle Subscription Services – New Ownership Options

Car ownership is changing.  These days, not every driver wants a car they have to maintain or even own or finance.  Leases made no-hassle ‘ownership’ commonplace with the ability to have a new car every year or so while bypassing much of the hassle involved – in some cases, including maintenance.   Today, several companies have taken that one step farther and introduced subscription services for drivers who want a streamlined experience, a firm budget and even simply something new every few months.

The Rise of Subscription Services

Primarily associated with magazines, newspapers and various forms of entertainment, monthly subscriptions have been common for generations.  Within the past several years, we have seen a rise in niche subscriptions – from regular steak and recipe ready food deliveries to subscriptions for grooming supplies, clothes and even pet treats.  It seemed like only a matter of time before these subscription services started addressing more high-end expectations.

Enter the advent of car subscription services.

The premise is essentially the same as other subscription services.  Users can opt to swap out their car on a regular basis, depending on their plan.  The monthly subscription fee covers everything from the car itself to maintenance and, in many cases, even insurance.  This leaves drivers free to swap out vehicles depending on the season, their travel plans or even just their mood.

If all that sounds like a dream come true to you, then have a look at the programs available.

OEM Programs

Car manufacturers have been quick to create programs that offer flexibility, security and plenty of options.  More and more companies are jumping on board and most OEM programs include insurance, making them streamlined.

Porsche Passport

The Porsche Passport program gives clients freedom of choice with two tiers of service and no restrictions on how often you can swap cars out.  The service, currently only available in Atlanta, gives drivers their choice of Caymans, Boxsters, Macans and Cayennes in their first tier service and adds on 911s and Panameras in the second tier.  Insurance is included as is detailed washes and unlimited mileage.  Monthly fees start at $2,000 and there’s a $500 application fee to join.

Mercedes-Benz Collection

Mercedes-Benz also offers a tiered program. The Reserve Tier gives users access to vehicles like the C43 AMG, the E400 wagon and the GLE350 SUV for $1,595 a month. If you’re willing to almost double that monthly payment, you can join the Premier Tier and opt for cars like the C63 S sedan, a G550 SUV or an SL550 roadster for $2,995 a month. This plan, like the Porche Passport, also has an application fee of around $500.  While the plans are by no means inexpensive, they do offer an easy to use app for switching cars and each vehicle is delivered clean, gassed up and ready to go.

Care by Volvo

Care, the subscription plan provided by Volvo, was originally announced at the 2017 Los Angeles Auto Show. The services offers access to the XC90, XC60, XC40, S90, S60, V60 Cross Country, V90 Cross Country models. The program is a 24-month subscription service and offers the ability to “upgrade” after 12 months making it a program that sounds more like an enhanced lease.

What the plan lacks in flexibility, it makes up for in service. For the monthly fee (which is determined based on the model you choose) you receive a slew of benefits including:

  • Premium Insurance – Volvo has partnered up with Liberty Mutual insurance for the coverage on the plan.
  • Service and Maintenance – Scheduled maintenance and service issues are all covered up to 30,000 miles.
  • Travel Protection – The plan includes road hazard protection and roadside assistance.
  • 24/7 Concierge – This services ensures smooth delivery and exchange as well as handling issues as they arise.

Book by Cadillac

Cadillac’s program, Book, was one of the first OEM subscription services offered. The program has a $500 enrollment fee and a monthly fee of about $1,800 but it gives users the ability to swap out cars up to 18 times a year and once one person is accepted, their spouse is covered under the insurance as well. As one of the original OEM subscription services, Book by Cadillac offers plenty of flexibility and access to the best models in the Cadillac line.

Access by BMW

The Access program from BMW also has a limited service area and is one of the newer programs on the market. Still, for $2,000 a month, fans in the Nashville area can gain access to models such as the 4-series, 5-series and X5, though it does not include M models. The Premium tier offers access to those M Models in the X5 and X6 as well as the M4 Convertible, M5 and M6 Convertible.

Third Party Plans

If you don’t want to limit your choices to a single company, you can also check out third party options.   While insurance is included in the OEM plans listed, third party options aren’t as standardized.  Some still include insurance coverage while others offer services to help drivers find insurance for the plan locally.  When this is the case, the extra insurance cost should be considered when comparing it to other plans.

Borrow

  • Base Cost:  $400 per month
  • Service Area:  Los Angeles, CA

Borrow stands out from the pack for car subscriptions in that it only features electric cars.  Its rental periods are a bit differently as well.  Users can choose an electric car for three, six or nine months in a cycle making it more like a long-term rental as opposed to a subscription.  The company bundles car offers with lifestyle items like swag bags, new products and discounts on local events and restaurants.  Insurance is not included with the monthly fees, which can range from $400 – $700 a month.

Carma

  • Base Cost:  $500 per month
  • Service Area:  Chicago, IL and Columbus, OH

The Carma program is based on mileage and their basic program allows for 500 miles a month for $500.  Insurance is included in the program and users can swap out a car every 30 days, unless they encounter a problem.  If a car has an issue then the car can be swapped out before the month is up.   The company also offers car subscription service platform and software support for OEMs and dealerships.

Flexdrive

  • Base Cost:  Varies by Market and car but all include a $500-$1000 deposit
  • Service Area:  Atlanta, Austin, Dallas, Philadelphia and Florida (mi, Hollywood, Margate, West Palm Beach)

Flexdrive has the widest variance when it comes to cost partly because of different markets but also because of the cars they offer and their terms.  Subscribers can borrow a car for as little as 7 days or they can go month to month on their plan.  This flexibility has made it popular with people who travel in their markets regularly.  The cars offered are previously owned, but well maintained and include 2017 models.

Fair

  • Base Cost:  $250 – $1,000+ per month (Depends on vehicle)
  • Service Area:  Chicago, Nashville, Philadelphia, Seattle and California (Los Angeles, Sacramento, San Diego and San Francisco Bay Area)

Fair runs their entire service online and through their app.  Subscribers scan their driver’s license and then agree to a “soft check” of their credit in order to be approved.  Car models start at around $250 per month, but this does not include insurance.  Maintenance such as oil changes and tire rotations are included and they also require a Start Payment on each car that is slightly higher than the monthly price.  This Start Price is charged only for the first month and is non-refundable if the car is returned with damage.

MotorEnvy

  • Base Cost:  $800 per month (Depends on vehicle)
  • Service Area:  New York, New Jersey and Connecticut

Michael Chuang had a problem. He wanted to lease a Porche but the problem was, the car he wanted was pre-owned. He was told it simply wasn’t an option by Porche and local dealerships so he set out to change that. He established MotorEnvy which features exotic luxury and sports cars.  Prices vary depending on the make and model, but most cars hover around the $1,500 mark.  Each car can be simply rented or it can be bought at the end of a year long lease period.

 

 

 

Related Podcasts:

  • The Future of Car Ownership Is ….
    Ryan Gerardi sits with Fair.com Co-Founder Georg Bauer and Partner Relations Manager Aida Takyrbasheva to discuss how a vehicle subscription model is customer-centric and gives everyone a win-win opportunity, and the fact that dealers don’t need disruption but rather partnerships and innovation.
  • Friction, Flexibility, and Vehicle Subscriptions
    AutoConversion Founder Ryan Gerardi sits down for an extended interview with Patrick Block from Flexdrive, an enterprise technology and services platform built to empower dealerships to offer consumers flexibility instead of commitment through vehicle subscriptions.


About the Author

Ryan G
Ryan Gerardi is Chief Editor of AutoConverse Magazine and Executive Producer and Host of the AutoConverse Podcast and Live Weekly Broadcast. He is also Founder & CEO of AutoConversion with nearly 20 years experience in the automotive industry. Ryan concentrates his efforts today on exploring people, ideas, and technologies related to how we get around and how we are connected.

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