Until very recently, your only options for vehicle ownership were to either lease a car from a dealership or buy one outright. However, in a large number of metropolitan areas, a third, more accessible option of car subscriptions is rapidly becoming a norm.
At the Los Angeles Auto Show in late 2017, Volvo first introduced their subscription model, announcing that their up and coming XC40 compact SUV would begin at a $600 every month subscription with a 2 year contract. The company also offers a $700 per month model, that includes a higher-spec’d R-Design rendition of the XC40 that comes with a Harman Kardon sound system and 20-inch wheels.
While the subscription model might look the same as leasing a car, there are a few major differences between the two. When you lease a vehicle, you pay a pre-defined, month-on-month payment to rent that particular vehicle until lease term is terminated. This can serve as an intelligent alternative when you don’t have the money required for a hefty car down payment. A lease, you’re able to drive a car that you cannot otherwise afford in your present circumstances. As the driver, you still need to deal with getting your own accident protection and managing regular upkeep of the vehicle. The car is usually under a warranty during the entire lease period.
Cadillac, Porsche, Ford and Volvo are among the few carmakers giving drivers the alternative of a subscription model. The biggest advantage of this is the time period: Rather than being attached to a years long lease, subscriptions enable you to “own” a car on a month-to-month premise. Hypothetically, you could not have a car for 10 months of the year when you’re making use of public transport, and get a vehicle subscription for the remaining two months when you’re expecting to travel more regularly. Most of the subscription models are designed to incorporate insurance, sparing you the hassle of hunting down a beneficial policy yourself. On a similar note, unlike a typical novated lease, you don’t necessarily need to purchase the car your subscribed to when your term expires.
Car subscriptions have garnered a lot of support from well-informed twenty to thirty year olds from residential metropolitan areas – a demographic that has been time-and-again pegged for avoiding car ownership (among the myriad number of things millenials have supposedly killed). As it turns out, most millenials prefer not to depend on Uber and public transit for their transportation needs. In any case, a subscription demonstrates lesser responsibility than an all-out purchase but more convenient and accessible than a car rental service like Zipcar, possessing all the necessary qualities for drivers wavering on the edge of forsaking car ownership, or ones who can’t exactly bear the cost of the car they have always wanted.
Canvas, the subscription model offered by Ford outlines the following process: To start, you pick a car, after which you pick a month-on-month mileage package that ranges from 500 to unlimited miles. Extra miles can be added to your package at a specified cost, however, similar to prepaid smartphone operator plans, in an event that you don’t utilize every one of the miles you paid for, they’re carried over to the following month. Once you’ve planned and scheduled the delivery, the vehicle lands with everything included—registration, insurance, warranty, protection, maintenance and roadside assistance. At the end of each month, you can either return the vehicle or renew your subscription.
Cadillac and Porsche offer comparative deals. The Porsche Passport gives you a chance to pick from 8 car models (counting the 718 Boxster and 718 Cayman S) for $2,000 every month or browse through the 22 distinctive Porsche models for a $3,000 membership. With Porsche Passport, you can switch cars as frequently as you want. With Cadillac’s subscription benefit, you can swap between cars as regularly as 18 times each year for $1,800 per month.
Care By Volvo is more constrained than these variants – but at the same time it’s also less expensive. At a $600 flat rate, you can subscribe to the XC40 Momentum SUV or a a higher end XC40 model for $700, that you can hold onto for 2 years – similar to an old fashioned lease. It also comes with factory-scheduled maintenance, roadside assistance, Liberty Mutual auto insurance and ‘wear and tear’ replacements on the most commonly replaced parts like windshield wiper blades. Unlike many of its larger rivals, Volvo gives their subscribers the choice to purchase their vehicle toward the end of their subscription term.
Looking at the costs, if the concept of car subscriptions continues to catch on, then it’s fairly easy to make out which car makers will win out in the end. Most of the car membership services offer a phenomenal approach to simplifying the car ownership experience. After all, if you can get a subscription for everything from meals to music, why should your car be any different?
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