Vehicle subscription service provider Mobiliti announced on Tuesday a new partnership with Island Auto Group that will provide a flexible transportation option for New Yorkers.
Launching in June with the intent to help city-dwellers navigate summer travel, the auto group will offer month-to-month vehicle payments that bundle insurance, maintenance, warranty coverage, and roadside assistance.
While the Island Automotive dealership is currently financing the fleet of vehicles, Ally Financial is working with Mobiliti to provide a fleet financing line specifically for this subscription service.
According to Mobiliti CEO and Co-Founder Chance Richie, a vehicle subscription is a suitable alternative for consumers to opt-out of certain commitments that come with ownership.
“A vehicle subscription service is for people who want a car but aren’t ready for ownership,” Richie said. “It’s similar to a lease, but without the things consumers dislike most about leasing including long-term contracts and upfront costs.”
Although specific costs will vary based on the make and model of the vehicle, Richie told Auto Finance News that price ranges from $549 to $1400. On the mobile app, the company provides a slide bar that filters vehicles on a range from $0 to $3,000. The subscription will also include certain mileage tiers that customers will select to meet their specific needs.
With a decline in new-car sales and an increasing inventory of used cars, Mobiliti notes that dealers can utilize vehicle subscription programs to generate new business by bringing in a third option and potentially generate additional sales.
“Mobiliti is helping to create another revenue stream and drive new customers to the showroom and service bays,” said Josh Aaronson, co-owner of Island Automotive.
With the subscription program, the dealer has complete autonomy to choose what happens to the vehicle. Richie told AFN that the dealer decides the availability of the vehicle for the subscription program based on miles driven or months in the program. The dealer has total control of how long the vehicle is in the fleet, he added.
Additionally, Richie noted that once the vehicle is turned in there are three options for the dealer.
First, the vehicle can stay in the fleet for additional subscriptions and is re-listed for sale concurrently. Second, the vehicle can be removed from the fleet and is moved back to the dealer’s inventory for retail sale. Third, the vehicle can be placed in wholesale auction channels.
