Are Millennials Driving Auto Dealers to Embrace Subscription Services?

Less Commitment – Subscriptions may be a year long; however, they usually allow the customer to switch their vehicle monthly.

Car Subscription Levels – Subscriptions do not necessarily have to be for the wealthy. There may be different level options for these subscription services, from “base” subscriptions that feature economy cars, up to luxury and exotic vehicles.

Minimal Upkeep – As customers return vehicles every month, they will go through inspection to ensure no maintenance will be required for the following month. As vehicles are rotated in and out monthly, it is easier to maintain the “health” of the fleet.

Vehicle Flexibility – Members have access to the entire fleet and can switch vehicles anytime. For example, they could have access to an SUV for a family road trip.

Convenience – Customers have the luxury of ordering their next car through a mobile app. The customer will simply log in to the app and schedule their pickup/delivery time. A concierge will then pick up/deliver your next vehicle.

Higher Costs – Customers will be paying a higher monthly bill that covers the cost of the car, insurance, roadside assistance and maintenance.

Subscription Retention – Dealerships and companies providing these services may have a decrease in subscription retention. Customers on a tight budget or feeling adverse economic effects may be deterred from paying their subscriptions, and in turn might lead the customer to purchasing/leasing another vehicle.

Limited Availability – Customers often discover that while it may be on the list of “available” vehicles, a specific make or model may not be accessible when they want it, as it might be “checked out” by another driver or it might be in maintenance.

Insurance Liability – Even though the monthly fee includes insurance, limits of liability may mean insurance may not cover all the damage in case of an accident.

Ownership – After a time, some customers may come to realize they are paying for the use of an asset which they do not own and may prefer to opt out and buy a vehicle.