LAS VEGAS — Chase Auto is experimenting in the subscription service space by funding a “cross-product or cross-model” offering, Chief Executive Mark O’Donovan said at the Auto Finance Summit.
Chase is providing a wholesale credit line, with the dealership groups running the subscription models, he said. “We’re dabbling in it to try to support our dealer clients, and we think there could be something there,” O’Donovan said, adding that his struggle with subscription programs is the scalability aspect.
“When you look at the depreciation that comes out of new cars, how you make the math work when you load everything up, I think the industry is generally struggling with that,” he said. “I always sort of look at the mass market brands — Toyota, Honda — can you make that work compared to what it would cost to lease or loan that same vehicle on a monthly basis?” he asked.
O’Donovan said there’s potential on the used-car side because of the depreciation curves.
Recently, O’Donovan met with a dealer group in San Diego that operates 14 or 15 dealerships. “They’re of the opinion that with used, across different products — Chevy, Ford, Honda, Toyota — that they might be able to make it work,” he said. “I think it’s a scalability question: How big can it really get?” he said.
