Car subscription is a relatively new alternative to leasing or owning a vehicle. Consumers can subscribe to a vehicle on a weekly or monthly basis and renew or extend their subscription period according to their needs. It offers people more flexibility in terms of how long they want to keep the vehicle as well as offering them a larger variety of cars to choose from in comparison to leasing or rental.
Car subscription has already made a huge impact on the automotive sector. This is partially because of the ease and convenience it offers the end customer. From their perspective, they can subscribe to a new car from the comfort of their couch and have it delivered to their doorstep. The car subscription model offers people access to a vehicle, and usually boasts all-inclusive packages, where the consumer does not have to worry about the expenses and responsibilities that come with car ownership such as maintenance, servicing, insurance payments, and registration hassles. Instead, they can choose to subscribe to a vehicle anywhere for as long as they need and pay only for the experience of driving the car and refuelling or charging expenses. The market for car subscriptions is quickly gaining traction because of the many benefits it offers to its consumers.
The car subscription market is starting to make an impact on the automotive industry. The younger generation today is used to subscribing to services instead of owning them.
This is largely due to subscription services gaining more popularity than ownership, such as Netflix, Spotify, and Amazon Prime. Now, this trend can be seen in the rapidly changing automobile sector as well. Car subscription services are gaining more and more popularity by digitizing their end-consumer experience. People can subscribe to a car with more ease and convenience through their phones and computers all from the comfort of their homes.
The average age of consumers who are choosing subscription over ownership ranges from 25-40. This is even more apparent when you see that the generation today has fast developed the taste for a lifestyle centred around the pay-as-you-go concept.
Many car subscription companies also offer their consumers the choice between all-inclusive fees and modular add-ons, so consumers can create a package best suited to their needs - these include options like tire changes, easily being able to swap a car or schedule a car service. This is one of the many reasons car subscription is becoming popular amongst the modern consumer. This may also have to do with the technological advances today, and how more and more people are looking for the easiest, and the most convenient digital experience available in the market today. While car subscription services are quick to jump on board the technology boat, car dealerships are still lagging in this area.
Consumers still have to visit a dealership to buy a car and in most cases, the process can be time-consuming and difficult.
As an example, MOOV by Al-Futtaim is a vehicle subscription service that’s built around consumer comfort and convenience. Their services allow consumers to opt for a more spontaneous and flexible way of having a vehicle without the commitment of owning one. MOOV also offers its consumers reliable service, roadside assistance as well as the option to have the car of their choice delivered to a specified parking location.
Another example of a car subscription service is FINN. FINN is working towards making car subscription an easy and instant solution for its consumers. Their services include everything that comes with a car subscription - except for fuel. They offer their consumers a fully digital experience as well as attractive and affordable pricing.
ELMO, ONTO and EZOO are UK based EV car subscription services that take care of all the needs of their consumers including insurance costs, delivery and pick-up, while allowing their consumers to manage their subscriptions digitally and conveniently from the comfort of their own homes. This rise in demand for EVs has also meant that many companies have launched salary sacrifice schemes to help employees save even more money on their car subscriptions. You can visit Car Sloth to compare the best EV salary sacrifice schemes.
While options like leasing and rentals have existed for a while now, and have been the go-to for people looking for a cost-effective alternative to purchasing a vehicle, subscription is a relatively new concept in comparison. Subscribing to a car, however, offers more flexibility, ease, and convenience to its consumers. It also offers people the option to opt for a fully digital experience, where they can have access to a vehicle without having to visit a dealership or wait for long periods for their new car to arrive.
This experience is proving to be very appealing to a vast number of people today. Even big automaker companies like Audi have started offering people subscription services for their cars. This provides access to expensive luxury vehicles to a larger number of consumers who otherwise might have gone for lower-end models.
Automakers are also partnering with subscription services to grow this accessibility to more and more drivers around the world. For instance, ALD has recently announced that it has acquired Fleetpool, a German car subscription specialist with a portfolio of over 10,000 vehicles to help develop their technology and help them scale digitally.
“They will stay independent, and we will help them grow”, say Tim Albertsen and John Saffrett, CEO and Deputy CEO of ALD, in an exclusive conversation with Fleet Europe.
Car subscription services are offering consumers a digitized experience, more flexibility, and accessibility to more well-maintained vehicles in the market with a much more reliable user experience. It is also more appealing to the younger generation who are choosing to move away from the traditional ownership model and towards a more open-ended experience that offers them more freedom from significant investments and responsibilities. With overseas travel becoming easier for more and more people, and jobs that require people to travel more frequently, consumers want to be able to move around freely without the commitment of owning a vehicle and the freedom to gain access to a car wherever they want.
With the growing environmental concern amongst people and the technological advances in the world today, electric vehicles are quickly gaining popularity. Big automobile companies are investing huge sums of money in the production of EVs due to it’s growing demand. EVs are going to be a big part of the future, and the common belief is that this is just the beginning of a market that is expected to remain on an upward slope.
We are now seeing more and more EVs on the roads today. The UK and Europe are quickly turning to EVs with the development of new charging points to connect cities and to make the daily commute more affordable and easier for drivers. One recent and major landmark for EVs is that lawmakers in the EU recently backed a new proposal to ban the production and sale of diesel and gasoline cars starting in 2035. This is only the first step, and we can see that the EU is fast moving towards an all-electric automobile sector. We’re seeing a rapid rise of electric vehicles on subscription in Europe. Today, in the EU, there are 7 times more EV’s on subscription than diesel or gasoline cars. These numbers are incredibly positive for a market that's only in its beginning stages and is relatively new.
Transport currently makes up about 26% of all UK carbon emissions - This becomes even more worrying when you look at these numbers globally. 20% of all greenhouse gas emissions can be traced back to transportation - and road transportation accounts for about 3 quarters of this share.
More and more people are now realising that this shift to EVs is vital in meeting our climate change targets. As more consumers educate themselves about the impact of fuel-driven cars on the environment, as well as the rising concern of climate change - EVs are becoming the new sustainable way of having a car. Many consumers as well as automotive companies are now making this green shift to EVs.
The number of EVs on the road has grown exponentially in the last decade. According to iea.org, 2012 saw about 120000 EVs being sold worldwide, in 2021 the same number of EVs were sold in just a week.
But many people are still hesitant about EVs at the moment, and investing in a market that is still at the beginning stages of its growth cycle can be daunting to some consumers. This is another area where car subscription is offering consumers an easier, more affordable and less daunting way of making this green shift.
Companies like FINN, EZOO, and ONTO are offering consumers a quick, reliable and affordable way of shifting to EVs through car subscriptions and are facilitating their entry into electric and hybrid mobility. They offer attractive costs, sustainable transportation options, as well as the ease and convenience of a fully digitised experience. This is allowing consumers to contribute to a sustainable future without the worries and responsibilities that come with owning a car.
Autonomy is another US-based company that is offering its consumers an easier and more affordable way of having a Tesla through subscription.
Car subscription allows people to test drive a vehicle, or have a car for a small duration of time to get a feel for how it operates, and whether it is a suitable option for them without having to purchase it. This freedom to test a car for a duration of their choosing empowers people and allows consumers to make sustainable choices. Car subscription is removing the barrier of the unknown and is allowing consumers to easily and affordably make this green shift to an electric car. People can move from ownership to usership by testing out the vehicle that better meets their needs to help them make a more informed decision.
The trend in today’s modern world is shifting toward the need for a strong online presence. The competition in the automobile industry for a more digital experience is growing quickly. Market players today are working to create user-friendly mobile applications and software to meet the growing need for digitization and a more convenient end-user experience. Companies are quickly moving towards well-developed websites as well as software to help with their business operations. There are now highly competitive tech companies working as consultants to large automakers and vehicle manufacturing companies to help them meet the changing demands of their consumers all over the world, especially in the growing market of car subscriptions.
For instance, car subscription market players like facedrive, Porsche AG, and Drover Limited now have well-developed digital online platforms, websites, and mobile applications to help with their business operations which has in turn helped them to create and grow more user-friendly online presence and generate more revenue. Tomorrow’s Journey is making this process easier for car subscription companies by enabling businesses to launch and scale with the exact subscription software they need to help with their business operations and is allowing car subscription businesses to make this move to a more digitised consumer experience easily.
With the rapid advances in technology, a car subscription is becoming the new way of gaining access to a vehicle. Car subscription services bundle all vehicle-related services in an all-inclusive package to ensure a profitable cash flow for the providers.
Analysts estimate that by 2025, 20 to 30 per cent of all new cars on the road will be on the car car-subscription model. While the traditional method of distribution involved an importer, the automaker, and a network of dealerships, the car subscription market is starting to offer direct distribution through digital sales and automaker-owned dealerships. Because of this, Car subscriptions are believed and expected to have a substantial impact on the automotive industry.
With changing times, we can already see massive growth in subscription services. This growth has now reached the automobile industry as well, and more and more companies are signing up to be a part of it. Some of the many big automobile companies such as Mercedes Benz and Audi have already started offering their consumers subscription-based models. This makes it easier for more people to gain access to cars that may otherwise have been out of their budget, and in turn, helps increase the dealership’s revenue.
Car subscription is a relatively new business model, but according to analysts and judging by the promise it’s already shown, it identifies well with the consumers of today’s modern world. It has been on an upward trajectory since its conception and is expected to grow further in the years to come as more and more people move towards usership instead of ownership.