An expansion of Mercedes-Benz’s subscription service is likely to spur new financing opportunities for the captive, Mercedes-Benz Financial Services USA, Vice President Geoff Robinson told Auto Finance News. “We are seeing subscribers use the program as a stepping stone to financing and leasing,” he said. “There certainly have been more doors opened for us because of that.”
Last week, the automaker announced it was expanding its subscription service, called Mercedes-Benz Collection, to Atlanta, where it also is piloting a new subscription tier consisting exclusively of high-performance AMG models. The expansion comes one year after the success of the Mercedes-Benz Collection pilots in Nashville and Philadelphia.
“The program far exceeded our expectations,” Mercedes-Benz USA vice president of sales Adam Chamberlain said in a statement. He noted that 82% of the subscribers are new consumers to Mercedes-Benz.
“In addition to the 82% conquest rate to the brand, we have seen a transition of customers from the subscription services to traditional leasing and financing,” Robinson said. “The trend shows that they enjoy the different vehicles for a while and become familiar with the brand, then opt to lease or finance a vehicle of choice that fits their lifestyle.” The program also has generated a younger customer base, on average – 41-years-old compared with the average Mercedes-Benz customer age of 53 years.
The OEM partnered with Clutch Technologies in the spring of 2018 as a part of Mercedes-Benz Collection’s initial launch. For the new Atlanta market, existing Clutch Georgia customers can switch their current Clutch subscription to a Mercedes-Benz Collection subscription – a move likely to boost the company’s conquest rate by “introducing a new pipeline of customers to our products,” Robinson said.
Currently, there are three tiers in the program – Signature, Reserve and Premier – ranging in price from $1,095 to $2,995 per month depending on the city, plus a one-time $495 activation fee. Subscribers may choose from a broad array of Mercedes-Benz vehicle styles, including SUVs, coupes, sedans and wagon models. The monthly fee includes insurance, 24/7 roadside insurance, vehicle maintenance and has no mileage limitations.
