How Will the Future of Car Subscription Services Affect Consumers?
Much like Netflix, your gym membership, and delivery services, the auto industry is going to be disrupted soon by add-ons! Despite existing customer’s obvious leery attitude about the prospect, automotive retail is now a reality. Familiar brands such as GM and Ford have expanded plans to allow specific features to be only available to subscribers. On top of already dishing out for things such as satellite radio, owners will be paying for other amenities as well. Here’s a look at the impact car subscription services will have on vehicle ownership.
The Future of Car Subscription Services
One of the things that are bound to make a few drivers a bit edgy is paying more for additional horsepower from the engine. We all know that the monthly lease of a car is a necessary cost, but that will no longer efficiently bundle all equipment. Consumers are now a bit weary of subscriptions, as so many items in daily life are “no longer included.” It doesn’t stop here: there are other troubling elements to this for-profit reality. Just as science fiction movies have depicted, there are many issues to examine that will change the landscape for dealers and drivers alike.
“I Own, Therefore I Owe.”
There are a few very crucial perspectives to examine when thinking about leaving the lot with your dream car. A very large number of high-end cars are driven by those who choose to lease. Owners love to heighten their visible clout by driving something simply amazing, and who can blame them? This would suggest that subscriptions to these clients may be not ill-received. With that in mind, a few high-end brands have not been successful at this during the first try.
Volvo, Porsche, and Cadillac had initiated full-vehicle subscription services that required a single monthly payment. The driver could mix things up regarding model types, and not be bound to one variant. Even though these plans provided insurance and maintenance, they did not see enough instant momentum. Buyers at the entry level want something alluring, but some who can afford royalty may opt for purchasing outright.
Are Things Intact After the Party is Over?
Residual values are a governing factor for any leasing price model. They represent the projected value of a vehicle when the lease is through. If a model touts a high residual value, it is easier for a dealer to offer a lower payment. If a vehicle’s residual value is lower, lease costs need to rise to cover the imminent future value drop. Since many luxury brands are frequently leased, subscription service addition poses a huge disruption.
Experts wonder if subscription-based features will make the vehicle’s residual value seemingly impossible to predict. There may even be two new statistics to even this out soon. One could represent the value with upper tiers added, with the other in its standard state. Polestar has introduced the option of upping the horsepower arsenal using an over-the-air upgrade. Would the extra muscle be included for the next owner, or is this an opportunity for yet another revenue collection?
Does the Plot Have Ending Credits?
If items such as heated seats can be an extra luxury, will this become the norm? Speakers, self-dimming headlights,or even air conditioning may fall under the guise of subscription. Ford’s BlueCruise driving system has already charged customers every three years for use. There may become a very gray area where federal regulators step in to dictate how much is enough. Features meant for safety could enter the category of another opportunity for markup.
“Psst, I got What You Need Right Here!”
Any time that digital paywalls are set in place to profit, a market surfaces controlled by those on the shadier side. Hackers are more than willing to spin their own form of voodoo to alter presets. This will ultimately add heaps of pressure on the companies listening to complaints from customers who feel nickel-and-dimed to the extreme. There will also need to be increased spending by the providers to keep black market activity from creating a catastrophe.
What About When One-Attractive Add-Ons Age?
One other ingredient to this soon-to-be-rushed recipe is going to be tough to control. Much like video game systems and smartphones, what is new today will be obsolete at some point. Subscription models will constantly have to change, and even if the price point stays the same customers will need to be in the know. The medium to deliver the functionality sufficient for a subscription may be obsolete in 5-10 years’ time.
The average lifespan of a vehicle is now around 12 years. Even owners that are very satisfied at first may not be so happy when they have to get used to modules within modules to retain features. Many large corporations learned during the pandemic that some customers need more explanations regarding what they are getting as a benefit. Even if subscriptions that cost more are not needed with a new release, they suddenly may become disillusioned.
Conclusion on car subscription services:
We all know that inflation is affecting families worldwide. Are car buyers ready to see massive additions in the form of subscription services? Perhaps the delivery and speed of the extras will be worth it. What do you think? Tell us in the comments below if car subscriptions are the future of vehicle ownership. Or, check out another article about how to save money on travel if you are feeling the budget get tight!
When did listening to the radio become a payable “luxury”? 👀