Introduction to Vehicle Subscriptions

For consumers, the allure of auto subscriptions lies in their financial flexibility. Gone are hefty down payments and long-term loans. Instead, customers enjoy the convenience of a single monthly fee that covers everything from insurance to maintenance and roadside assistance. It's like having your cake and eating it too, but without the hassle of baking it yourself.

Examples of these automotive subscriptions include services such as Porsche Passport and Care by Volvo, which offer customers access to various vehicle models, along with insurance, maintenance, and other services, all bundled into a single monthly payment.

Yet, as with any major shift, there are potential speed bumps along the way. While the monthly payments may be manageable, the cumulative cost over time can exceed that of purchasing a vehicle outright. Additionally, mileage restrictions and wear and tear charges could throw a wrench in the works for drivers who cover long distances or have a less-than-gentle touch on the steering wheel. Lastly, choice may be limited as not all manufacturers offer their entire range through subscription services.

In a traditional lease, the consumer usually pays a down payment, followed by fixed monthly payments for car use over a predetermined term, typically two to four years. After this period, the car is returned or bought out. Unlike subscriptions, leases often have strict mileage limits, with significant charges for exceeding them. The lease typically excludes insurance, maintenance, or roadside assistance, which consumers must manage and pay for separately.

In contrast, vehicle subscription models bundle these additional costs into one convenient monthly fee, offering a more comprehensive, worry-free mobility solution. Subscriptions also provide unparalleled flexibility in terms of vehicle choice and the ability to switch cars to meet a consumers' ever-changing needs and desires. Users can also cancel the service without the long-term commitment required by a lease.

Types Of Vehicle Subscription

Manufacturer Subscriptions

Offered directly by automotive manufacturers, providing access to a specific brand's lineup of vehicles.

Top Players:

• Fair Square Financial, LLC
• Clutch Technologies LLC
• CarNext.com
• Flexdrive
• Cluno GmbH
• Drivemycar AG Rentals Pty Ltd
• BMW Group AG
• Daimler Truck AG AG
• General Motors
• Hyundai Motor India Ltd.

Dealer Subscriptions

Programs provided by dealerships offering access to vehicles from their inventory, often including maintenance and insurance.

Top Players:

• Lexus
• Bimmer World
• Ald Automotive
• Smas Auto Leasing India Pvt Ltd
• Avis Lease
• Orix India

Third-Party Subscriptions

Offered by independent companies, providing access to vehicles from various manufacturers.

Top Players:

• Enterprise
• Hertz
• Sixt
• Europcar
• Fair
• Cox Automotive
• Mycardirect
• Onto
• Cocoon Vehicles
• elmo
• Flexigo
• Flexed

Luxury Subscriptions

Luxury car subscriptions have become a compelling alternative to traditional ownership, offering high-end driving experiences, without the associated high upfront cost. The allure of driving prestigious vehicles without the constraints of ownership has fueled the rising trend of luxury car subscriptions.

If you're confused about whether to buy a new luxury vehicle or to subscribe to one, this blog will serve as a guide to help you make a more informed decision about the best choice for you. We'll explore some benefits of subscribing to a vehicle over ownership, do a cost comparison between the two, and discuss key players in the market offering luxury car subscriptions.

Short-Term Subscriptions

While mobility offerings such as car sharing are clearly the answer for short-term mobility with maximum flexibility, we have seen a gap in the market for mid-term flexible mobility solutions. Vehicle subscription models will play a key role in filling that gap. In Europe's five core markets, we expect more than 10 percent of new vehicle registrations for private and corporate customers to be subscription-based by 2025. Overall this represents a volume of >€22bn in new annual auto financing which is up for grabs by new players. Download the Deloitte white paper "Vehicle-as-a-Service" or "Subscription decoded" to find out more.

Usage-Based Subscriptions

In summary, subscriptions represent a fundamental shift in viewing vehicle ownership and usage. Subscriptions are well positioned for rapid mainstream global adoption by tapping into flexible, sustainable mobility demand. Though challenges remain, the industry is evolving to disrupt traditional ownership models. We may see ownership and usage offerings transform over the next five years to be nearly unrecognisable compared to current norms. Over the next five years, we will likely observe a substantial and sweeping metamorphosis within ownership and usage offerings.