Purchasing a car is one of the largest decisions a person can make. Humans rely heavily on cars to get them from point A to point B and everywhere in between. You’ll likely be spending several years with your vehicle, which makes it a very important investment as much as it is a simple purchase. Traditionally, in order to purchase a vehicle, you had two options: purchase it outright or pay for it in installments through a lease. But this is 2018, and we do things differently now.
In the last few months or so, several of the world’s most revered and successful car companies have revealed their newest plans for customers to purchase the latest and greatest models: subscription services. While each individual company’s service is slightly different, overall, they work on the same principle. In essence, customers pay a monthly fee in order to rent out the vehicles.
Cadillac’s subscription service, dubbed “Cadillac Book,” works very similar to Spotify or Netflix: you pay a monthly fee of $1,500 for the ability to rent out a car, but you never own it. For the acute observer, you will notice that, with that rate, you will likely wind up paying more for the car through Book than through a traditional financing payment plan, however, with Book, users are not responsible for insurance or maintenance costs on the device. Additionally, users can switch out cars whenever they desire, through the use of the mobile application.
Volvo’s version, dubbed Volvo Care, offers a slightly different service. With Care, subscribers pay a flat rate to lease a car (ranging from $600 to $700 per month) which includes insurance, maintenance, wear and tear, and no money down. At the moment, the Care program can only be used with the XC40 Momentum (from $600/month) and the R-Design (from $700/month).
Now, BMW is looking to get in on the subscription service action with their own spin on it. According to multiple reports, the service will be tested in Nashville, Tennessee to ensure its scalability.
Could these new subscription services be the way of the future? Will our grandchildren only know of leasing out a car through a subscription service? Although it is far too soon to call, it is most certainly a possibility.