Customers have endless options when it comes to personal transportation, ranging from the traditional purchase or lease of a vehicle, to on-the-spot rentals and ridesharing services such as Lyft and Uber. Nearly 40 years after the leasing model was adopted by Ford, a new contender is rapidly emerging: subscription-based vehicle services.
Many are seeing this as an option tailor-made for the urban, tech-savvy, debt-averse, independent-thinking millennial generation. In fact, millennials will comprise 40% of the potential vehicle ownership market by 2020. Early models for subscription services are looking to adopt the same models and platforms that millennials and others are using for other services to secure haggle-free access to goods and services.
Hassle-Free or Just a Hassle?
A range of car manufacturers and specialized providers are beginning to offer subscription services. The configurations are many, from basic packages that cost around $275 per month to packages that offer a choice between various luxury vehicles for a flat, haggle-free fee of up to $2,000 per month. Most subscriptions include not just access to a vehicle but maintenance costs, registration, insurance, and roadside assistance. Some luxury packages go further and feature unlimited mileage and/or unlimited swaps to new vehicles with full fuel tanks.
