GUIDE TO CAR SUBSCRIPTIONS, AN ALTERNATIVE TO BUYING OR LEASING

April 2, 2019

 

It's 2019. We have drones and hover boards, our phones unlock by scanning our faces and anything in the world can be delivered to your door with a couple of clicks. Why should we be stuck with buying or leasing as our only means of procuring a car to drive?

 

Thankfully, vehicle subscription services are becoming more and more popular. Think of it like any other subscription: Sign up for what you want, and only pay for what you need. From automakers to third-party companies, there are many ways to subscribe to your next new car.

 

Think about it, you don't buy CD's anymore you subscribe to either pandora, spotify, or iTunes Music. You also don't buy your DVD's either: you most likely have a subscription to hulu, spotify, or another streaming service. Why than, would your vehicle situation be any different? Subscription cars are the way of the future!

 

Freedom Supercars pioneered the automotive Subscription model in the United States in 2009, disrupting the market. Now, within the last few years big automotive companies have taken notice and have realized that the market is shifting to a new audience that wants something more convenient, interchangeable, and flexible to their wants and needs.

 

 

Here is a look at how many companies believe in the car subscription model

The OEMs

If you're familiar with any vehicle subscription service, it's probably one of these. In essence, you pay a monthly fee to a manufacturer for access to several vehicle models in its lineup. In addition to access, this fee covers the cost of insurance, maintenance and roadside assistance.

 

BMW

Access by BMW

 

BMW now has a pilot program running in Nashville for its subscription service, Access by BMW. The program, like Porsche's is a two-tiered affair and again, like Porsche, isn't cheap. The first tier, which BMW is calling "Legend" will set users back a cool $2,000 per month and gives access to vehicles like the 4-Series, 5-Series, and X5 (sans M models) as well as the excellent M2. Upgrading to the $3700 M tier and things start to get really interesting with access to the M4 Convertible, M5, M6 Convertible, X5M and X6M.

 

Users can order vehicles through the Access by BMW app, an so far there doesn't appear to be any restriction on vehicle swaps. Your monthly subscription fee includes insurance, and roadside assistance, as you'd expect. The program will be facilitated by local dealers and not by BMW corporate and BMW hasn't given word on if/when it will expand the program beyond Nashville. 

 

 

 

 

Cadillac

Book by Cadillac 

 

Cadillac's service was one of the first OEM subscriptions to be announced when it debuted in January, 2017. Initially, it was available only in New York City, but as the program continued, its service area expanded to drivers in Dallas and Los Angeles. It requires a $500 enrollment fee before requiring another $1,800 per month for the service itself. However, the upside is that it offers access to some of Cadillac's best cars, and it allows you to swap cars up to 18 times per year. Insurance and concierge service were included in the cost.

 

Cadillac had so many people wanting to do the program that they stopped it to make sure their service could meet the large demand, and will re-launch the program in mid 2019. 

 

 

 

 

Volvo

Care by Volvo

 

Volvo launched its Care by Volvo service at the Los Angeles Auto Show in 2017 alongside its new XC40 crossover. The Swedish automaker has since vowed to include all of its models in the Care program, but currently, we only have pricing for the XC40.

 

The Care by Volvo plan for the XC40 starts at $600 per month for the T5 Momentum trim and goes up to $700 per month for the T5 R-Design, both of which you can configure yourself. You start with a $500 deposit which then gets applied to your first month's payment.

 

Lastly, unlike the more expensive programs by Cadillac and Porsche, Care by Volvo only lets you swap cars every 12 months in most markets. They very quickly sold out all of their spots and are no longer reserving spots at the moment.

 

 

 

 

Jaguar Land Rover

Carpe by Jaguar Land Rover

 

Most of the OEM subscription services that we're talking about let you swap cars out whenever you feel like it and cost a boatload of money. Only Care By Volvo locked you into a car for a 12 month period, but not any more, because now Jaguar Land Rover is getting into the game with Carpe (as in Carpe Diem, which I think is Latin for "Dead Poets Society is one of the best Robin Williams movies"), a new subscription service that is, for the time being, only available in the UK. 

 

Like most subscription services, it's all-inclusive so your monthly fee takes care of the car, insurance, maintenance, etc leaving you to deal with fuel and not much else. Carpe isn't cheap, but neither are Jags and Land Rovers, so your basic E-Pace SUV will run £910 (around $1,200) per month and range (get it?) up to £2,200 (about $2,900) for a Range Rover Sport HSE. Interestingly, Jaguar Land Rover isn't requiring a deposit to be put down, but should you choose to do so anyway, it will lower your monthly subscription cost.

 

 

 

 

Lexus

Lexus Complete Lease

 

Lexus will open its Complete Lease program in the first quarter of 2019 with the newly unveiled UX crossover. The program will offer a two-year, 20,000 mile lease inclusive of insurance and maintenance for a single, non-negotiable price. Details are a little thin at this point, with Lexus refusing to divulge whether prospective lessees will configure and order their cars at a dealership or online, or how just how much one would expect to pay for the program.

 

Lexus has confirmed though that the program will launch in Boston, Chicago, Los Angeles and Miami with the potential to expand to other cities if everything goes well, ditto to other models if the UX proves to be popular.

 

 

 

 

Mercedes-Benz

Mercedes-Benz Collection

 

Mercedes-Benz has been talking about launching its pilot program for a car subscription service for months but now it's a reality. The program is called Mercedes-Benz Collection and like most of the other OEM programs, it's not cheap but it might be worth it if you really love that three-pointed star.

 

The program is called "Mercedes-Benz Collection," and it actually provides a pretty broad range of cars to those who subscribe. The plan, like others from OEMs, has more than one tier. The Reserve tier will cost $1,595 per month and gives you access to vehicles like the C43 AMG, the E400 wagon and the GLE350 SUV. For $2,995 per month you can access the Premier tier, and with that, you can drive around in a C63 S sedan, a G550 SUV or an SL550 roadster.

 

Joining is a relatively simple process. You just have to download the Mercedes-Benz Collection app, go through the prompts which include sending a photo of your driver's license, and in around 24 hours you should have a decision on your application. You then pay a $495 application fee, and you're in.

 

 

 

Porsche 

Porsche Passport

 

Porsche's Passport service is expensive, but it gives you a lot for your money. First, there are two tiers from which you can choose. The first tier is called Launch will set you back a tidy $2,000 per month and gives you access to an unlimited stream of Caymans, Boxsters, Macans and Cayennes.

 

If you're a true baller, you can upgrade to the Accelerate plan, which runs $3,000 per month and gives you access to those three magic numbers that drive every Porsche fan crazy: 911. Panamera, too. That said, exclusive models like the GT3 RS are off-limits no matter what. Sorry.

 

The next thing you need to know, and perhaps the biggest bummer about the whole Porsche Passport program, is the geographical area it serves. If you don't live in Atlanta, you're outta luck for now. Apart from that, it's all sunshine and roses. Porsche doesn't put any kind of restriction on the number of vehicles you can change into, and its insurance is decent, though still with a $1,000 deductible.

 

 

Audi 

Audi Select

 

Following the lead set by other companies including BMW, Cadillac, and Porsche, Audi is launching its own monthly car subscription service as a pilot program in Dallas, Texas. Called Audi Select, the new program allows the participant to choose any of five different models for a flat fee of $1395 per month.

 

The five available models are the A4 Quattro sedan, the A5 cabriolet, the Q5 crossover, the larger Q7 SUV, and the sporty S5 coupe. Audi allows just two vehicle changes per month, a contrast to the Access by BMW and Porsche Passport programs, which allow unlimited car swapping every month. When you are ready to change out your car through the Audi service, a concierge will pick up the current vehicle and drop off the new one to you, either at a dealership or at your home.

 

Maintenance, roadside assistance, and insurance are all included, and Audi puts no cap on mileage. Also included are two days of free Silvercar rental per month; Silvercar is an Audi-owned premium rental-car company with 24 locations in the United States. Membership for Audi Select is nominally for a 12-month term. 

Third-party services

These subscription services aren't directly backed and managed by a vehicle manufacturer. Most offer used, or off-lease vehicles, and prices vary pretty widely as does the level of bundling. Some services, for example, provide insurance bundled with the vehicle while others will help you find insurance. Others, meanwhile, leave you to figure it out yourself. The benefit to third-party services is that they're usually much cheaper than the OEM options, and represent lower-cost ways of getting into a vehicle.

 

 

Freedom Supercars

Freedom Supercars offers the only option for supercar subscriptions to be able to interchange between big names like Lamborghini, Ferrari, McLaren and more. Plans offer members to pick either 15, 30, 60, or 100 days, which offers plenty of time to enjoy in the “weekend car”. Members can switch between the vehicles as many times as they would like getting the opportunity to drive them all with memberships starting at just $1,000 a month.

 

Freedom offers the best and only option for the supercar enthusiast who doesn't want to deal with the huge depreciation, pain of service departments, or hassles of traditional ownership. 

 

See more on memberships here

 

 

 

 

Canvas

Canvas is a different kind of subscription service altogether. It's backed by Ford Credit and offers Ford and Lincoln vehicles exclusively, but rather than having brand new shiny cars for you, you're paying for used off-lease vehicles that are several model years old. In fact, as of this writing, the bulk of the cars available through Canvas in West Los Angeles are from the 2015 model year.

 

The Canvas program is more à la carte, allowing users to select different subscription lengths and mileage packages to go with their vehicles. Insurance is included, as with most subscription services and Canvas cars come with Ford's Protect Premium Maintenance Plan. 

 

The Canvas pricing structure is interesting too, again because of its à la carte nature. When signing up for Canvas, first you select a subscription length from one to 12 months, and the longer your subscription, the lower your monthly fee. For example, a one-month subscription would cost $375 while a 12-month subscription would cost just $250 per month. Next, you choose your vehicle. Lastly, you choose your mileage package.

 

 

 

 

Flexdrive

Flexdrive allows you to select a car via its app, pay a weekly fee -- which differs from car to car -- and pay for mileage on top of that. One of the benefits is that Flexdrive doesn't make you choose up front how long your subscription will be, unlike Canvas. This, plus its week-to-week pricing, offers a ton of flexibility, which might be cool for someone who only needs to travel occasionally.

 

 

 

 

Less

Less is a Bay Area-only service that functions much like a traditional lease with the exception that you're allowed to change your car once per year during your three-year contract. Less also offers a monthly discount on your lease, which it says will offset the $399 annual membership fee, which is, incidentally, the only money you pay to Less directly. Your monthly payment goes to the dealership from which you get your car.

 

Your choice of cars is pretty decent in terms of quality if not variety, with around 12 options at any given time. Less selects luxury cars and SUVs from Audi, BMW and Mercedes-Benz, each with a sticker price more than $60,000 and negotiates rates in bulk which allows for the discount that it passes on to the customer.

 

 

 

 

Borrow

Borrow is an electric car-only subscription service that will give you an EV for three, six or nine months at a time. Borrow functions more like a rental service since all vehicles remain the property of Borrow. The EVs that it provides to customers are all used and available in the Los Angeles area only.

 

Customers can currently choose from two tiers of electric vehicles, each with different pricing. The lowest-cost tier is the "City" plan. Those who opt for the City plan can choose either a Nissan Leaf or a Fiat 500e, and prices range from $499 per month for three months to $399 per month for nine months.

 

The next step up is the "Premium" plan. This gives users access to either a BMW i3 or a Volkswagen eGolf. This tier ranges from $624 per month for three months to $524 per month for nine months. There is a third "Platinum" tier planned which offers a Tesla Model S, but this isn't yet available to subscribers.

 

 

 

 

Fair

Fair is another lease-like program with the benefit of being almost totally online. It is a program that was created for dealers to use to help move thier used inventory in stock and make them availible under a subscription service model. Users have to download the Fair app and then scan their driver's license to get approval. Fair then runs a soft check on their credit to determine the maximum payment that they'd qualify for and shows a collection of vehicles in their area that they can afford.

 

Again, where it differs from a lease is that the user isn't locked into a set-length contract. Fair offers customers the option to trade up or return vehicles. Another key difference is that unlike other subscriptions, Fair asks that you make a "Start Payment" which is higher than your typical monthly payment and is linked to the overall value of the car.

 

 

 

 

Carma

Carma, based out of Detroit, has pilot programs running in Chicago and Columbus, Ohio, and is focused on the mainstream car shopper as well as the dealer/retailer side of things. While it doesn't have a hard and fast list of vehicles which will be offered, the founders are clear that they will not be catering to any kind of commercial customer. Lyft and Uber drivers, look elsewhere. Drivers are required to be 21 years of age and have a clean driving record.

 

 

 

 

 

Mobiliti

Mobiliti is kind of like fair. It is a subscription based model for vehicle dealers to move cars and not let them sit on the lots. It is provided to attract new customers who want something different. It's not used to replace the sales side of the business, but to aid it in a turn-key way. There is great benefit for customers who are not quite ready to buy or sign a long-term lease that now have a new option to consider until the time is right for a commitment. It is also good for the people who like all-inclusive prices that are transparent, so there are no negotiations or surprises.

 

 

 

 

 

 

 

Some info from CNET: Kyle Hyatt

 

 

 

 

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