When you want to listen to new music these days, you subscribe to a music platform, like Spotify, Tidal or Google Music. When you want to binge watch a show, you subscribe to an entertainment subscription service, like Netflix or HBO Go. When you want fresh food delivered to your door, you subscribe to Blue Apron. The list goes on and on, but you get the idea: streaming subscriptions have greatly affected the way people buy things in the modern age.
There’s no reason why cars should be any different. In fact, you might argue that because cars are so expensive the automotive industry would benefit most from a subscriptions model. Enter the “car subscriptions service”, a relatively new concept that is shaking up the automobile industry’s approach to car financing.
What Is a Car Subscription Service Anyways?
A car subscription service operates much like the other services mentioned above. You pay a flat monthly fee for access to a range of different products, in this case, automobiles. When you sign up, you choose a monthly plan that fits your budget, as well as a car to fit the plan. At the end of each month, you have the opportunity to either renew your car or swap it for another car (or, if you wish, you can cancel the whole subscription entirely).
How Do You Get Started?
It’s pretty simple: joining a car subscription requires you to download an app and register for the program. The service will perform a brief and very streamlined credit check, which only takes a moment, and then, as mentioned, you simply pick your plan and car. You don’t have to physically go down to the dealership, nor do you have to sign a lot of paperwork.
What Are Some Advantages of Joining a Car Subscription Service?
As you might have gleaned from the above section, one of the key benefits of a car subscription program vs leasing or buying is its ease of use. With the rise in eCommerce, consumers across industries have come to expect simplicity and brevity in their transactions, and car subscriptions definitely offer that.
Flexibility is another value that consumers have pointed to as a positive distinguishing factor of car subscription services. Many people are reticent to enter long-term contracts for a single vehicle – they want to own a car for 5-10 years. Many people, especially those who work in the gig economy, aren’t sure where they’ll be next year, let alone in five years. Car subscription services offer a flexible way to drive the car you want, without any of the conventional strings attached.
Finally, not all people need a car year-round. For instance, older people who travel south in the winter (they call themselves “Snowbirds”) don’t need a year-round car. But they can easily subscribe to car subscription service for two-thirds of the year, and cancel for the other third, saving a lot of money.
The benefits of this new service are still being discovered, as more people switch over from leases and conventional finance options to try this exciting alternative. Expect to see car subscriptions everywhere in the next decade!