Changing consumer behaviours, the rise of EVs (electric vehicles), and growing demand for flexibility have made car subscriptions one of the most promising opportunities in the automotive industry. Unlike traditional leasing or car rentals, subscription services offer a compelling package that often includes insurance, maintenance, and roadside assistance, giving customers a convenient, worry-free driving experience.
With the US car subscription market valued at $1.4 billion in 2024 and projected to grow at a CAGR of 17.1% to reach $6.4 billion by 2033, the window to create a foothold in this market has never been more promising. Companies like Volvo, Hyundai, and Finn have already launched successful subscription models in the US, proving that both established OEMs and innovative new players can thrive in this expanding space.
If you’re a car dealership, an OEM, or an established business looking to capitalise on this lucrative trend, this guide is for you. Below, we’ll walk you through everything you need to know about launching and scaling a car subscription service in the US, from choosing the right business model to understanding regulatory challenges.
The growing adoption of car subscriptions is largely driven by shifting consumer preferences and evolving industry trends. Here’s why this model is becoming increasingly relevant in today’s market:
Millennials and Gen Z consumers are redefining the idea of ownership. They prioritise access and flexibility over long-term commitments or significant upfront costs. Car subscriptions cater to this mindset by providing an alternative to traditional car ownership, giving them the freedom to adapt their mobility options based on their lifestyle needs.
As the use of electric vehicles continues to grow, many potential users remain hesitant to fully commit to an EV due to uncertainties about charging infrastructure, range anxiety, or the overall experience. Subscription models allow customers to “test drive” the EV lifestyle for a longer period without the financial and emotional pressures of ownership, making the transition to electric mobility more accessible and less daunting.
In today’s fast-paced world, convenience is king. Car subscription services align with the modern trend of simplifying life through recurring and on-demand services. Just as consumers rely on streaming platforms or meal kit deliveries, car subscriptions offer the ease of access, maintenance, and insurance bundled into one service, removing the hassle traditionally associated with car ownership.
The pandemic fundamentally shifted the way people think about transportation. With public transport seen as less safe and many rethinking the need for permanent assets like cars, the demand for flexible mobility solutions has surged. Subscription services provide a middle ground—offering the freedom of private transport without the financial commitment of ownership.
By combining flexibility, convenience, and adaptability, the car subscription model is carving out its place as a go-to solution for today’s evolving consumer needs.
33% of US car owners have expressed interest in subscribing to vehicles, highlighting an increasing demand for flexibility among consumers.
Before committing to a car subscription service, it’s important to understand the market landscape. This includes identifying your potential audience, recognising regional differences, and pinpointing where subscription services are most likely to thrive. Having a clear view of these factors will help you tailor your service to meet demand effectively.
Car subscriptions appeal to a wide range of consumers, from young professionals in busy urban areas to corporations seeking flexible fleet options. These services cater to different needs, making them an attractive alternative to traditional car ownership. Here are some common use cases:
By understanding these user groups and their unique needs, you can position your car subscription service to succeed in this growing market.
The US market for car subscription services is expected to experience significant growth, with projections rising from $1.4 billion in 2024 to an impressive $6.4 billion by 2033. This substantial increase highlights the long-term profitability and growing demand for flexible car ownership alternatives.
On a global scale, the car subscription market is set to grow even more dramatically, surging from $9.2 billion in 2024 to an astounding $791 billion by 2032. These numbers underscore the potential of this innovative model to revolutionise the automotive industry worldwide.
While urban areas such as New York City, Los Angeles, and San Francisco dominate the subscription market thanks to the high demand for commuter-friendly options, suburban regions are beginning to catch up. These areas are particularly seeing growth in subscriptions for family-oriented vehicles like SUVs, as more families look for flexible and convenient transportation solutions.
Your business model is the foundation of your operational strategy, customer acquisition methods, and profit margins. Picking the right model can significantly impact how you engage customers, manage resources, and achieve long-term profitability. Below are the four primary models to consider, along with examples of how they’re shaping industries today:
Original Equipment Manufacturer (OEM)-led models are spearheaded by major car manufacturers such as Volvo, Hyundai, and BMW. These companies are taking control of the customer experience by selling subscription services directly to consumers, bypassing traditional dealership networks. For example, Volvo’s “Care by Volvo” program offers a subscription that bundles vehicle access, insurance, and maintenance into a single, convenient monthly payment. These models provide a seamless, all-inclusive experience that appeals to customers seeking simplicity and flexibility, while also allowing OEMs to maintain direct relationships with their customers and collect valuable data.
In a dealer-led model, local dealerships create their own car subscription services by leveraging their existing inventory and customer base. By doing so, they can provide a more personalised experience tailored to the needs of their community. This model empowers dealerships to deepen customer relationships while enhancing loyalty. Dealers can also benefit from adopting newer business strategies, such as dynamic pricing, to provide competitive subscription rates. This approach not only diversifies revenue streams but also ensures dealerships remain relevant in the rapidly evolving automotive landscape.
Companies like SIXT and Hertz are demonstrating the effectiveness of fleet and rental-based subscription models. In this approach, businesses utilise surplus inventory from their fleets, such as rental cars, to offer subscription services. This strategy maximises asset utilisation and minimises idle time for vehicles, ultimately increasing profitability. Fleet-driven models often focus on providing flexible options with short-term or long-term subscriptions, making them ideal for customers seeking temporary vehicle access without the commitment of ownership. Additionally, this model helps rental companies tap into a growing market of users looking for convenience and mobility without the hassle of traditional rentals.
Technology partnerships are transforming the subscription landscape by enabling dealerships and OEMs to scale their services without developing in-house technology solutions. White-label car subscription platforms, such as Tomorrow’s Journey and REV Technology, provide end-to-end solutions that include order fulfilment, billing, fleet management, and customer support. These platforms allow businesses to focus on their core competencies like customer service and vehicle sourcing while outsourcing the technological infrastructure. This model is particularly beneficial for businesses looking to launch subscription services quickly and efficiently without the need for extensive tech development, making it an attractive option in today’s competitive market.
Each of these models offers distinct benefits and challenges, so the key is to align your choice with your business goals, resources, and target audience. By carefully selecting the right business model, you can create a sustainable and scalable framework that meets the demands of today’s consumers while staying ahead of the competition.
Sourcing and optimising your fleet is critical for the success of your car subscription business. Strive to maintain a balance between pre-owned and new vehicles to maximise ROI without compromising on availability or quality. A diverse fleet can also appeal to different customer needs, from budget-friendly options to premium experiences. Regularly assess vehicle utilisation rates to ensure your fleet is being used efficiently and adjust as needed.
Car subscriptions thrive on simplicity, and customers expect an all-inclusive experience. To meet these expectations, include comprehensive insurance and maintenance in your plans. This not only makes the service more appealing but also provides peace of mind to customers. Additionally, ensure that insurance policies and maintenance schedules are clearly communicated to avoid confusion and build trust. Partnering with reliable service providers can further enhance the customer experience by ensuring fast and efficient support when needed.
Your sales and service staff play a critical role in delivering a seamless customer experience. Equip them with the knowledge and tools needed to handle subscription-related queries, both online and in-store. This includes understanding pricing models, subscription terms, and troubleshooting common issues. Regular training sessions can help keep your team up-to-date with the latest offerings and best practices. A confident, well-trained staff can make all the difference in building customer satisfaction and loyalty.
A well-thought-out pricing structure is essential for balancing profitability with customer appeal. By designing flexible pricing options, you can cater to the diverse needs of your customer base and ensure your offerings remain accessible to various consumer segments. Flexibility allows you to attract both budget-conscious users and those seeking premium options, ultimately broadening your market reach.
One way to achieve this is by introducing mileage tiers, such as 10k, 15k, and unlimited mileage plans. This approach caters to both low-mileage users who want affordable options and high-mileage users who require greater flexibility. Additionally, dynamic pricing can further enhance your structure by adjusting rates based on factors like vehicle type, mileage, and demand. This ensures that your pricing remains competitive while aligning with market trends and customer preferences, creating a win-win situation for both your business and your customers.
The average cost of subscription services in the US ranges between $750–1,600 per month, depending on the vehicle and service provider.
To run a successful car subscription service, you’ll need robust software that covers all the bases. Look for platforms with essential features such as booking systems to manage reservations, fleet operation tracking to monitor vehicle usage, billing automation to streamline payments, and analytics dashboards for data-driven decision making. The right software will be the backbone of your operations, ensuring efficiency and scalability.
Enhance your operations by customising your tech stack with CRM (Customer Relationship Management) and DMS (Dealer Management System) integrations. These tools improve customer service by providing better communication and support while also streamlining backend operations. A well-integrated system lays the foundation for a smoother, more efficient customer and administrative experience.
Today's consumers demand seamless, mobile-first experiences from start to finish. Whether they’re browsing options or signing up for a subscription, a mobile-friendly platform is critical. Prioritise user-friendly design across all your digital touch-points to ensure your customers can easily navigate your service, boosting engagement and satisfaction. A great mobile experience can set your brand apart and attract loyal customers.
Operating in the US requires careful alignment with both state and federal regulations to ensure compliance and avoid potential legal issues. Key areas to pay attention to include:
Understanding and adhering to these regulations helps establish trust with your customers and ensures smoother business operations.
To stand out in a competitive market, your messaging should clearly communicate modernity, reliability, and simplicity. Focus on crafting a value proposition that resonates with diverse customer needs. For example, a tagline like “A car for every lifestyle, a subscription for every need” could effectively capture the essence of your offering. Pair this with consistent branding across all platforms to reinforce trust and recognition.
Drive user engagement and signups by utilizing a diverse mix of digital marketing strategies. Invest in Google Ads to target potential customers searching for flexible car solutions, and collaborate with influencers on platforms like Instagram to showcase your service in action. Additionally, consider launching test-drive campaigns, where QR codes placed in high-traffic locations allow interested customers to quickly sign up and experience your service first-hand. This blend of convenience and accessibility can boost conversions and attract users who value efficiency.
Expand your reach and strengthen your offerings by forming partnerships with local dealerships or fleet providers. These collaborations can pave the way for hybrid subscription models that combine the convenience of digital platforms with the physical accessibility of nearby service hubs. Such partnerships not only enhance the customer experience but also help establish a network of trust and reliability, positioning your brand as a comprehensive solution for modern mobility needs.
Car subscription services are revolutionising the way consumers approach vehicle ownership, signalling a major shift in consumer behaviour and mobility preferences. Instead of committing to long-term leases or outright purchases, more people are opting for flexible, all-inclusive subscription models that allow them to adapt their vehicle choices to their changing needs. With the US car subscription market projected to grow at unprecedented rates in the coming years, businesses that embrace this trend early stand to gain a significant competitive advantage.
Whether you’re an independent dealership looking to diversify your revenue streams or a global OEM seeking to lead the charge in mobility innovation, now is the time to act. Developing a compelling car subscription service requires a combination of customer-centric design, operational efficiency, and the right technology to ensure seamless execution. This guide provides valuable insights to help you craft an irresistible subscription model that aligns with consumer expectations and capitalises on one of the most exciting transformations in the automotive industry.
Take the next step toward transforming mobility. Contact us to learn how our tailored solutions can support your car subscription model from day one, ensuring a smooth transition into this rapidly growing market.
