Clutch is aiming to increase the number of OEMs and dealers using its subscription platform by the end of the year, according to Mark O’Neil, chief operating officer at Cox Automotive, which purchased the technology company in August.
To date, Clutch has signed on BMW, Mercedes-Benz, and Porsche. O’Neil said the company is in discussions with several others car makers and is hoping to have at least three more testing the platform by January. “As we get into the first quarter of next year, it would be reasonable to say we’ll have somewhere between six, and maybe as many as eight OEMs, piloting a subscription service,” O’Neil told Auto Finance News.
In addition, O’Neil said there are 35 dealer groups currently using the platform and he expects that number to increase to at least 50 dealer groups by year’s end. “Not one of the dealers we’ve signed is a single point. If you think about that, by the 1Q 19 we’ll have well over 500 dealers in the U.S. experimenting with subscription services.”
He declined to name the OEMs and dealer groups Clutch is talking to.
The planned expansions will give consumers more exposure to subscription services.
“To date, the subscription service has been targeted to the more affluent customer,” said O’Neil. “With that said, [with] two of the three OEMs that are on the platform, approximately three-quarters of the customers who are using their subscription program have never had exposure to that brand,” said O’Neil.
Some lending institutions have criticized subscription models as only serving high-end consumers. However, at least one finance executive said the model could be ideal for low-income and subprime consumers.
“A subscription model is this space, that is reasonably priced, could change the way these customers own vehicles,” said Greg Skurkovich, the newly appointed chief operating officer of Turner Acceptance, an auto loan financing service. “They don’t have the negotiating power to secure a good price on their loan, insurance, and repairs. this segment is best served by a car that has a warranty, maintenance, insurance wrapped up.”
