Owning your own car was for a long time the ultimate status symbol. A way to tell the world that you were a grown-up, ready for any adventure and successful enough to be able to afford it. Cars didn’t only provide freedom of movement but were also a form of self-expression and said something about who you are (or want to be). A lot has been written about declining car ownership, but let’s not forget that the dream of having your own car is still alive and kicking in most parts of the world and for many people.
On the other side of the spectrum are the fast growing ride-hailing services and car-sharing platforms. These digitally fueled mobility solutions have sprung up in recent years to enhance the existing urban transportation infrastructure. These sort of services are especially popular with the urban millennial population, to whom traditional car ownership brings more hassle than freedom. If you live in a large urban center and only need a car occasionally anyway, why bother to own your own car?
A huge gap remains however between these two worlds. What about those who need a car to drive to work every day, but don’t want to spend all their savings on a depreciating asset? What about those who don’t want to worry about repairs, maintenance or the resale value, but want to enjoy the convenience of having a car at their disposal? Or what about those who don’t know yet what they will be doing three years from now, let alone what their annual mileage will be? This is where car subscription services on high-quality used cars come in.
Let me elaborate on both ingredients of this concept. Firstly, car subscription services (or Car-as-a-Service) offer greater choice, flexibility and convenience in individual transportation. For a monthly all-inclusive fee, customers get a car of their choice. Insurance, service, maintenance and other factors are all covered in one price. Drivers just add fuel and pay any fines. There are no long-term contracts, no deposits and no early cancellation penalties. In some cases, subscription services even involve the possibility to swap your car for the weekend.
So why a used car instead of a new one? 3-4 year old used-cars don’t suffer from steep depreciation anymore, but still feature the latest technology, prove to be reliable companions and simply offer a great driving experience. They offer excellent value for money, meaning that customers can either drive the same car for a lower monthly fee or drive the brand and model they have always dreamt of but weren’t able to afford straight out of the factory.
The combination of used cars and subscription services is golden in a market where simplicity, flexibility and value for money are the name of the game. And customers are starting to notice: last year, at CarNext.com we already helped 8,000 customer to drive their dream car following the subscription concept.
As is often the case, demand for used-car subscriptions is pushed by younger and tech-savvy customers. They are used to paying for things through monthly subscriptions that can be canceled at short notice. Car subscriptions provide the convenience and flexibility people have come to expect in other aspects of their lives. It’s only a matter of time until the mass market will realize.