Subscribe and drive
Technology and Business
As more of us than ever before are turning to flexible subscription models for things we used to own – think movies, music, even games – how long will it be before we subscribe to drive too?
In this article, Alice asks:
- What are the benefits of a vehicle subscription model?
- How can I join a subscription service right now?
- What does this mean for our driverless future?
Many car manufacturers already offer drivers the option to subscribe to a car service, rather than buy, and as we come closer to a driverless future, it looks set to become increasingly common. We’ve discussed how private car ownership will dwindle as autonomous driving progresses for some time now. So, will car services which are more like signing up to Netflix than splashing the cash on a new motor become our new normal?
Why are car subscriptions seeing a boost?
Vehicle subscription services have been around for a while, but they seem to have piqued our interest in the wake of Covid-19. In April, as many countries went into lockdown, car sales fell dramatically, and though those figures have been rising again, our outlook has changed.
Where many had ditched private ownership in favour of greener public transport or ride-hailing services, now those same people are realising the practicality of constant access to a personal vehicle. This trend has been seen across China and Japan and is now spreading to Germany and the UK. Vehicle access is now more valued than ownership.
What are the benefits of a vehicle subscription model?
When you subscribe to a vehicle service, life becomes a little easier. With most plans, you receive your car fully taxed and insured and have the added benefit of never having to pay out for maintenance. This means that, while the monthly payments may seem more expensive than leasing, or even using a regular ride-hailing service, the cost ultimately balances out.
Ease of use is a huge selling point. First of all, you don’t have to worry about all the tax and maintenance issues anymore. Secondly, drivers can choose their car and have it delivered to their drive – once AVs are an option, this will become even simpler. Flexibility is important too. Often drivers are able to change the model they receive to fit whatever they have planned that month and can even pause the subscription if they’ll have no need for a car.
How can I join a subscription service right now?
Plenty of manufacturers are already offering subscriptions and third-party services like Cluno and Drover, which offer drivers the chance to pick from a wider selection of models, have started to pop up all over the world too. Sadly, AVs are not on offer just yet, but the packages OEMs are currently offering gives us some idea of what we could expect in years to come too.
The latest in a growing list, Care by Volvo is one of the most recent subscription services to be launched by a major car manufacturer. Monthly payments with Volvo start from an affordable $650 , with no deposit needed. Conor Horne, Volvo’s UK boss, says this package is, “a great way for people to access the car they want, avoiding the complexities and the long-term commitments associated with traditional car ownership.”
Jaguar Land Rover
Offering an impressive range of vehicles on subscription, Jaguar Land Rover’s model works over four tiers. For £750 ($962) per month, the ‘Blue’ tier grants you access to the likes of a Jaguar F-Pace or Discovery Sport, but if you’re desperate to drive a Range Rover, you’ll have to opt for ‘Ultra Violet’ at £1,600 ($2,052) per month. But they’re flexible; once your 90-day minimum term is up, you can pause your subscription and reactivate when it’s convenient.
Operating already in Japan, the US and Ireland, Nissan’s offering is set to expand soon, and is an affordable option. Its entry-level tier offers drivers a new 202 on subscription for as little as €356 per month, without having to pay a deposit. Plus, there’s the option to trade in your old car and use its value against your new subscription.
This subscription comes with a taste of luxury which is reflected in the starting price of around $2,100 per month. Porsche Drive allows customers in the US access to all the latest models and, interestingly, is opening up the world of Porsche to plenty who have never driven one before.
What does this mean for our driverless future?
In the automotive market, driverless technology is a major disruptor and so too are these subscription models. Both will change the nature of the industry and many predict that driverless cars will thrive in this non-traditional ownership model. A significant number of drivers are currently needed for the model to work efficiently as cars must be moved from one client to another, and to a base for inspection and cleaning. With driverless tech, the empty vehicles could just do these drives by themselves.
For manufacturers, these changes present an opportunity, rather than a threat. We may no longer view cars as status symbols and expressions of personality in the same way drivers once did, but subscription models allow OEMs to capitalise on our desire for convenience. Volvo predicts that by 2025, half of the cars it makes will be driven through subscription and, according to consultancy, McKinsey, more than half of all revenue from the automotive industry is going to come from ‘disrupted’ business areas such as autonomous cars and subscription driving by 2030.
Already it’s clear that manufacturers are on board with this model for vehicle access over ownership, and the industry as a whole might use the change as an opportunity to look inward and ask important questions. Will people want to subscribe, rather than own, in the future? What will we be willing to pay for that service? And might this be the way to encourage new customers to give AVs a go?
We’d love to know your thoughts. Would you choose to subscribe to a car service? Are you already signed up? What would you like to see in your perfect deal? Let us know in the comments below.
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