Consumers are flocking to new ways of vehicle ownership.
Economic uncertainty, ongoing supply and inventory issues and high average transaction prices have paved the way for alternative options to car ownership. Vehicle subscription companies have popped up to fill a need as an alternative to buying or leasing a vehicle.
Vehicle subscription services streamline the process and make “owning” a vehicle fast, easy and affordable. With a vehicle subscription a consumer is not buying a car, so there is no financing or long-term debt. Like a lease, the car is not yours, but unlike leasing consumers can swap vehicles in shorter periods of time. Some companies offer bundle insurance, maintenance, and other perks into one monthly payment. Two types have emerged, automaker subscriptions and third-party services. Third-party services aren’t directly aligned with a vehicle manufacturer and therefore offer more choice of vehicle type, including electric vehicles.
The total number of unique visitors to automaker and third-party subscription pages grew 78% in the first half of 2022 vs the first half of 2021. Unique visitors during the summer (May-July) increased 76% in 2022 vs the same time period the year prior. Consumers may be turning to vehicle subscription services to fill a gap for summer rental needs as the traditional rental market has been constrained since the pandemic began.
Some automakers offer vehicle subscriptions for certain vehicles within their lineup. For instance, Audi offers two subscription tiers: the Core Collection for vehicles such as the Audi TT, A4, S3, and Q5 and the Premier Collection for the S5, Q7, A5 Cabriolet, A6 and more. In looking at the visitation, Audi is the most visited automaker subscription brand. However, Volvo grew the most from the first half of 2021 to first half of 2022: unique visitors to Volvo’s subscription pages grew 60% during this time while Audi’s fell 14%. While small, Porsche, Nissan and Lexus also saw increased unique visitors over this time.
Third-Party Subscription Services
Third-party subscription services are growing as more entrants enter the market. Some more traditional rental companies like Hertz and Enterprise offer a vehicle subscription offering while companies like Autonomy and Borrow offer electric vehicle subscription services.
The most visited third-party subscription services in 2022 are Autonomy, Fair and Sixt. Autonomy is an electric vehicle subscription company that launched in August 2021. They offer Tesla subscriptions and had the highest number of visitors in the first half of 2022. All third-party subscription services saw growth during this period, except AAA.
Vehicle subscription is in its infancy, but, given the growth we’ve seen over the past years, consumers have an appetite for an alternative to vehicle ownership. Just as consumers have become acquainted with subscriptions for phone and cable services, vehicle subscriptions look ripe for continued adoption.
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