Car as a Service: A Forced Trend Going Nowhere Fast

RoadShow recently ran a guide to car subscription plans that run the gamut in type and price.

It got me to thinking–do people really want to pay for a car subscription which seems like a cross between car renting and car leasing? It’s a lot more expensive than owning or leasing a car, so why would anyone want to do it?

The appeal might be for motorists that they could simplify the driving experience by an all-inclusive lease with less commitment. A subscription allows you to roll into one price the payment for the car, insurance, registration, warranty, roadside assistance, and maintenance. At the end of the month or week you can decide to renew your subscription or return the vehicle. Some of the appeal with different automakers is that you can switch vehicles based on current needs.

Currently, the car companies involved want to hook folks up with high end models that are indeed high end prices ranging from $600 to $3000 per month. There are other programs that allow you to subscribe a used car for less.

Just because automakers and start-up companies want to force this trend, does not mean everyone else wants it. Little details are forthcoming on the success or failure of these programs. There are problems though.

General Motors The Book by Cadillac lasted about a year before the venture folded in November 2018. Customers had to pay $1800 per month for the pleasure. Customers could switch out a car up to 18 times per year. GM plans to reboot the service later this year with more help from their network of dealers. The first time around, the company used a fleet service.

California Volvo dealers filed a petition in January with the state’s New Motor Vehicle Board over claims that the Care by Volvo car subscription service violated franchise laws intended to stop automakers from competing with retailers.

Another issue with Cars as a Service concerns geography. Automakers and others are choosing one to three cities at a time to try it out, or stick their toe in the water so to speak. That limits the pool of interested customers.

Car subscriptions were initially thought to replace the purchase of a vehicle. Sort of like ridesharing except you drive. But not really…that’s car sharing.

Too many choices and whoever said we want a Car as a Service anyway!

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