What Successful Examples Can Be Provided Concerning Vehicle Lease/Rent Subscription Models?

    

Subscription services aim at a system that integrates asset management and vehicle use across different modes of mobility: subscription, rental and car sharing. Shifting vehicles between different mobility services could, for example, shift the provision of on-demand assets from rental to subscription. One option could allow users to switch between regular vehicles, exchange plans, lower prices, car sharing and more. [Sources: 3] 

    

Price will vary depending on the type of car insurance and additional fees that the driver has incurred, so it is advised to consider these options when deciding on long-term rental. Also, remember that your insurance company or credit card may have limitations on how long it covers a rental car. If customers keep their car for a few months or a few years, there is no penalty for a return if they want or need anything other than initial prepayment, which acts as a natural deterrent for people hoping to treat a subscription as a rental. [Sources: 0, 2] 

    

Our car subscription service is the solution for those who want more flexibility than with car leasing. Subscribe to a car subscription and say goodbye to the old difficulties of owning or leasing a car. A car subscription at its core is a new take on an old business model you may be familiar with. [Sources: 1, 4] 

    

Check with your own insurer before renting a car for more than a few weeks. While the major car rental companies consider it too expensive, many offer long-term deals that can reduce the price to a weekly rate. [Sources: 0] 

    

The car rental company has a new program that allows subscribers to choose between three monthly subscription levels starting at $5.99 per month. Their monthly rate starts at $45.9 and covers automobile use and car-related costs such as registration, dealer fees, and routine maintenance and service fees. Unlike most subscription services, the monthly fee for car insurance and maintenance is included, so you have to worry about fuel, but not much else. [Sources: 6, 8] 

    

Outside of that, Volvo’s subscription program costs 28 percent to 102 percent more than the equivalent cost of leasing, insurance and maintenance of a typical car per month and that does not take into account the one-time fees for joining such subscriptions, which range from $495 to $575. The Volvo treatment locks you in the car for 12 months, which is not much more than a Jaguar Land Rover, but getting in the game early is crucial as the little-known subscription service Carpe was at the time only available in the UK. [Sources: 8, 10] 

    

The cost of leasing a car varies depending on the type of vehicle that you choose, including estimated depreciation, lease life, rental costs, taxes and fees. When you lease a car, the payment is not only based on the purchase price of the car. The monthly lease payment is calculated by adding up the amount of new car likely to depreciate, the rental cost (similar to interest on car loans ) and taxes / fees divided by the total amount plus the number of months in the lease. [Sources: 5] 

    

It is common for leasing companies to charge a purchase fee to offset the administrative costs of handling the lease, such as drawing your credit report and checking your car insurance cover. Leasing agreements can also involve substantial fees if you do not own the car when the lease ends. Most low-cost used cars are leased vehicles with a strong track record of resale, especially later models with low mileage. [Sources: 5, 11] 

    

Car subscriptions tend to be less restrictive than leasing contracts because it is easier to cancel the subscription and switch to another vehicle. Many subscription contracts include all aspects of ownership (repair, maintenance, royalties, smog checks, insurance) in a single monthly payment, making your life easier. In the past, car subscriptions offered the ability to change vehicles at will if your requirements changed. [Sources: 4] 

    

New car rental subscription programs complement the crowded field of subscription options. Some are willing to pay for a selection of high-quality cars, while others are interested in the subscription model for lack of hassle. Since these subscription models are not yet available, a real comparison is difficult. [Sources: 3, 6] 

    

The car rental company competes with automakers for subscription programs. Some automakers have taken an early lead in subscription programs like Care by Volvo, offering drivers the opportunity to rent rather than buy. Care seems poised to increase acceptance of vehicle subscriptions, and others will follow with its hybrid subscription-meets-lease solution. [Sources: 6, 10] 

    

FlexDrive works with local car dealers to offer subscriptions for vehicles in their inventory. Subscription services offer their customers new cars that are less than a year old. Vehicles are in their first year of depreciation, so the fleet includes both young used cars and new cars. [Sources: 3, 4] 

    

Lease rates are usually lower than the loan payments for the same make and model, and you pay the depreciation in full instead of the purchase price for the car. [Sources: 5] 

    

If you are familiar with subscription services, they are one of the many ways to subscribe to your next new car. For example, some services offer insurance bundled with the vehicle, while others help you find insurance. Some are on par with the cost of a car loan for the same used car, while some are fair prices and others are service fee bundles. [Sources: 2, 8] 

    

Mercedes says its subscription cars are the last three model years while Porsche Passport guarantees its cars for the current year. In contrast, the service is only operated in the Nashville, Tennessee area. [Sources: 10] 

    

    

        

    

##### Sources #####

    

[0]: https://blog.autoslash.com/best-monthly-car-rental-deals/

    

[1]: https://www.sixt.com/plus/

    

[2]: https://www.latimes.com/business/story/2020-03-11/fair-car-buying-app

    

[3]: https://www.oliverwyman.com/our-expertise/insights/2019/jun/automotive-manager-2019/sales/a-car-without-the-commitment.html

    

[4]: https://www.jdpower.com/cars/shopping-guides/from-fair-to-volvo-how-does-a-car-subscription-work

    

[5]: https://www.creditkarma.com/auto/i/cost-to-lease-a-car

    

[6]: https://www.forbes.com/sites/christopherelliott/2020/11/28/these-new-car-rental-subscription-programs-will-get-you-there/

    

[7]: https://www.investopedia.com/best-car-subscription-services-5112003

    

[8]: https://www.cnet.com/roadshow/news/car-subscription-guide-buying-leasing/

    

[9]: https://howtostartanllc.com/business-ideas/car-rental

    

[10]: https://www.cars.com/articles/do-the-math-car-subscriptions-as-lease-alternative-dont-add-up-1420700634669/

    

[11]: https://www.davidcorrycars.com/end-of-lease-faqs.htm