There was a time when we had to go to theaters to watch a movie and then “Netflix” made it possible to watch a movie of your choice in the comfort of your home. The concept of car subscription services is transforming the face of mobility in a similar manner. A person who owns a car has to deal with all the associated costs including car insurance and maintenance and might have to take out a hefty loan to cover the cost of the car. The idea of a car subscription service offers all the convenience of owning a car while giving added flexibility. Some plans offer the option of changing your car while others cover maintenance and insurance for a nominal amount. Different startups, dealerships and automotive manufacturers are now trying out various plans to cater to the different tastes of consumers.
According to Edmunds which deals with information regarding the auto industry, a typical car loan in the United States takes six years to pay off and any service and customers are going to love any option which does not make such heavy demands on the pocket or will offer more choice. Generally, a subscription service offers for a flat monthly fee, access to a car, its insurance and maintenance for an all-inclusive fee. Subscribers will not have to worry about incurring having to pay off a loan, heavy one-time costs like a big downpayment or hefty insurance premiums.
It does not mean that car ownership will be suddenly cheaper, but the service does make life and day to day financial juggling simpler.
One example is Flexdrive, based in Atlanta, accompany with over 9,000 subscribers, with 600 to 800 new ones being added every month. New subscribers can order a Flexdrive on its app within minutes after enrolling without any contract or credit check. All they need is a clean driving record, three years’ experience on the road and a credit or debit card in their name. They can then pick up a car from the nearest dealership that is associated with Flexdrive. During vacations, it is possible to return the car to the dealership and pause payments till you return instead of simply parking the car in your garage. Subscribers do have to pay a refundable deposit, but there is a lot more flexibility and they can have a Toyota Yaris for USD 400, while a Porsche Cayenne would cost USD 1,500.
The monthly subscription is an all inclusive fee that covers a warranty, standard roadside assistance, maintenance and insurance. When their vehicle is due for maintenance, subscribers receive an alert and they can take their car to the nearest garage that Flexdrive partners with for repairs which will be covered by the subscription charges. If you would like to have another car, you can trade in your current model. Flexdrive does not own the cars but collaborates with dealerships and pays them for using the cars on a monthly basis.
Fair is a similar service based in California. You can subscribe by scanning your driver’s license on the Fair app, and put in your credit, income and other variables to generate a list of vehicles which are available based on these criteria for your use. Once a car is selected, Fair buys the car for the subscriber. When the subscriber wants to switch cars, Fair gives dealerships the option to buy the car back or auctions the vehicle. The average Fair subscriber pays a monthly subscription fee of about USD 350. The fee covers a limited warranty, routine maintenance and roadside assistance. The start payment is about three times the monthly payment. People can return a car anytime, with five days notice.
Automakers who are offering vehicle subscription services include Volvo, Mercedes, BMW and Porsche. Volvo’s Care offers users a car for a monthly fee of about USD 650 a month, and this covers insurance, maintenance and delivery.
This has helped Volvo to get access to customers who are about 10 years younger than typical Volvo buyers.
A subscription service is highly useful for those who do not want to be ties to the same car for the long term and do not like the surprise of occasional high repair or maintenance costs. Those who use such services need not worry about big downpayments and have the option of easily switching to other cars.
In view of the fact that life is Dubai is quite transitory and many people here change cars within a short span of time, it is only a matter of time before car subscription services become all the rage in our region.
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