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Car subscriptions offer plenty of attractions. For a monthly fee, subscribers have a car but not the hassles of car ownership or car leasing, such as maintenance, repair and insurance. They can switch vehicles more often — to a different model or just a newer version of the same. Moreover, customers are relatively unaffected by the auto industry’s prevailing supply bottlenecks, and they often get a car delivered to their front door.
But the model has yet to take off, especially in the United States. One reason is that awareness of the service is low. An Oliver Wyman survey found that Americans were attracted to the benefits of car subscriptions: One in five respondents would adopt the model. But of these, two-thirds did not even know that subscription models existed before participating in the survey. The results indicate the need for marketing and other activities to ignite demand.
One market with a relatively large number of car subscription contracts is Germany, where an estimated 100,000 to 200,000 car subscriptions have been purchased, and some studies have suggested that subscriptions will account for up to 40 percent of market share by 2030. In the U.S., rates are typically somewhere between those for leasing and rental and usually start at around $500 a month for small, volume-brand cars, rising to $1,500 for premium brands. That usually covers everything including repairs, insurance and other expenses apart from fuel. While the rates initially seem relatively high, it could work out to be not much more expensive than traditional car ownership or leasing — the total cost of mobility is usually underestimated by consumers.
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