Consumers are familiar with the two traditional options for vehicle ownership—buy a car, or lease a car. However, a new option has been emerging in recent years: vehicle subscriptions. A vehicle subscription includes a set monthly payment for a certain period of time- as short as a day or two or as long as several years. The subscription generally includes insurance, vehicle registration, maintenance, and may include roadside assistance. Depending on the service, a consumer can subscribe to one car, or to a fleet of cars to use on an as needed basis.
Companies such as Clutch, Carma Car, and Flexdrive (tagline-“All the car, none of the commitment”) offer software platforms for companies to provide cars by subscription to consumers. These platforms often connect subscription services by car dealers with consumers, and operate in cities around the country.
Automakers—particularly luxury brands—are also launching their own exclusive subscription programs, which vary in location, term, and pricing. On Demand by Audi offers a fleet of Audi cars for consumers to try out in several cities around the world. Porsche Passport similarly provides a monthly subscription service to sports cars in Atlanta. Book by Cadillac allows subscribers to exchange vehicles up to 18 times per year. Canvas by Ford offers cars for 1-12 months or longer, with lower subscription rates for longer terms. Care by Volvo includes upgrades every 12 months, and includes a 24/7 concierge. Maven by GM is a car sharing service exclusively offering GM brands.
However, the vehicle subscriptions are also gaining increasing government scrutiny. In March, 2018, Indiana enacted a temporary ban on car subscriptions until May 2019. In California, where many car subscription services are offered, a bill passed the state Assembly in June that would restrict subscription business to franchisees, only to be amended in later readings to remove the language regarding subscription services. Lawmakers in New Jersey are reportedly considering similar changes.
How the subscription programs are structured—and the involvement of dealers and automakers in the subscription programs—will be an area of development as the programs expand to a greater number of cities and states around the country.
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