Forget rideshare, car subscriptions are a form of 'brandshare'
5:58

Forget rideshare, car subscriptions are a form of 'brandshare'

Roadshow
You can subscribe to movies, music, even meals. So why can't subscribe to car? Well, as you may know you can. Here's why you may want to and may not want to [MUSIC] [MUSIC] Current subscriptions are kind of the new lease that can be offered by a factory by a dealer or by a startup that just does this kind of thing. The idea is to freshen up the lease to give you a car that changes more often so you don't have the same damn one for two or three years. But also to give you flexibility of vehicle types, sometimes you need a sports car or an SUV or just a nice sedan. And this gives you that ability depending on the plan you choose. The most obvious attribute of a car subscription is its short term. Not only short term of how long your stuck with a given car but often short term of how long your in the program at all. Some of these let you go month to month. You can be in for a month then cancel and move on. If you don't wanna be in that brand of car or don't even wanna have a car at all for a while. Now of course the really fun part is the choice of cars. instead of buying a Volvo this or a Cadillac this. You're buying Volvo or Cadillac or Porsche. And then within there, the plans give you some degree to a wide degree of which car you want. And you can change these up really rapidly in some cases, or maybe only once a year in others. You've gotta be very aware of the rotational speed each one offers. [UNKNOWN] And for the financially tiny amongst you, these are really attractive because they have heavily all in one pricing. About all you're going to pay for is the gas you use and the parking you take advantage of, all the maintenance including tires and brakes. Insurance and all the laborious changing of cars it's all rolled into the package in most cases. On the high hand, you've got plans like Portia passport launched in Atlanta promised in a handful of additional cities soon, it offers all the basic benefits we outline with no mileage limit and no-limit of times you can flip cars. Million dollar liability coverage. You change cars by tapping on an app and a concierge arrives with your new toy. Now that's a lot of latitude in your toy box, right? That's why it cost a lot of money. 2000 bucks to have a choice of a Boxster Caiman McCaughan or Chi in $3,000 per month. If you want to also add 911 and Panamera to your Me, on the other end are much more restrictive plans that often look barely different from Elise. Care by Volvo only offers two cars, the 60 and an XC40 and 15,000 miles a year, a 24 month commitment and the option to change cars only after 12 months. And even then, only if you're re-upping for another 24 months in the program. On the other hand, this plan only costs 700 to 850 bucks a month. That's a fraction of Porsche Passport with a fraction of the fun and flexibility. It depends what you're looking for. Kind of somewhere between those two plans is or was booked by Cadillac. It's currently being retooled for a relaunch at least as of our shoot day today. When it was last available. It was 1800 dollars a month, a maximum of 18 car swaps a year. That's a pretty good number. And a mileage cap of 2,000 miles a month within that $1,800 payment, and of course, it rolled up all the maintenance and insurance that all these plans do. Then there are plans run by startups that are not tied to a brand. Canvas for example, lets you choose from a variety of cars in a pool in San Francisco, LA and soon Dallas with monthly rates that vary based on the car you select, and how long you willing to commit to it. Three to 12 months. Typically, they give you a base of 500 miles a month. Higher ranges are available for more money and of course, maintenance insurance is included. Fair buys late model used cars from dealers and then makes them available by subscription. You drive the car you select, more or less as long as you want. When you return it, you start a new monthly plan for a different car but it's all at your discretion. [UNKNOWN], these startups along with others like mobility and [UNKNOWN] are offering dealers another channel to move their large number if not [UNKNOWN] of used cars. So there's a look at some of the ways that you can get into subscriptions. Why are carmakers though getting involved in this, I mean they sell cars But it's a pretty good business for them, right? Subscriptions seems like an awful lot of high-touch overhead. Well, there's some pretty good reasons. It starts with getting new blood in the door, new customers. Porsche says their Passport program, 80% of the people that come into it are new to the brand. They've never had a Porsche, buy or lease before. And remember, they're new to the brand at $2,000 to $3,000 a month. That's marketing gold. Then there's the so called millennialization factor. I'm not sure how much of this I really buy but the surveys tell us that y'all millennials don't like to buy things you like to use them, experience or subscribe and rent to them. So be it. Regardless of how much of that is true, this answers that appetite. And finally the big picture factor the subscriptions are setting the table for. And that is future testing of models that That will work around autonomy. The big picture on self driving cars is that they may make a lot less sense as something that you actually own. This amazing autonomous machine that you're gonna park 96% of the time? [MUSIC] This moves us into the area of mobility services in shared vehicles and subscriptions begin to break us away from the rigid model of owning one car for a long time, but instead having something a little more flexible. That may be an easier way to hide the sticker shock of how expensive the car itself is going to be and getting a subscription appetite out there in the market now, May get things warmed up for that tomorrow. [SOUND] [MUSIC]

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