Once Hailed As The Next Evolution In Car Buying, Car Subscription Services Are All But Gone

Illustration for article titled Once Hailed As The Next Evolution In Car Buying, Car Subscription Services Are All But Gone
Image: Volvo

Just a few years ago, car subscriptions seemed as if they were going to be the next big thing in vehicle purchasing. Every automaker from Porsche to Ford and even car rental agencies were getting in on the game. Now though, most of them have all but quietly vanished.

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Subscriptions came about because of bad assumptions made by automakers. Mid-decade, the assumption was that by now (or at least going into the 2020s) we’d all be transitioning in a driverless car utopia and single-person car ownership would be a thing of the past. People would simply order up an autonomous vehicle from a free-roaming fleet to get to their destinations. Since no one would actually buy cars, people would subscribe to use them, essentially ending car ownership as we currently know it.

It seemed like car subscriptions would have widespread appeal. An all-in-one payment that bundled service, insurance, and the monthly payment into one with the ability to switch between vehicles on a whim made sense to a lot of companies, if not to consumers.

There are (or were) 19 subscription programs spread across independent companies, automakers and rental agencies. Some were only available in select areas while others had to pull out of some markets due to legal challenges.

Only two subscription programs from automakers are still running in the US: Care by Volvo and Porsche Drive. Jaguar Land Rover’s subscription program called Pivotal that is still in operation, but it’s only available in the UK. Genesis’ program, called Spectrum is available in Korea and here in the U.S. but only at one Genesis dealership in Tampa, Florida.

Care by Volvo launched a couple of years ago. Bundling insurance, maintenance and car payment into one monthly payment, Volvo attempted to lure in younger (i.e. Millennial) buyers who didn’t want a car payment or the baggage of ownership. It should be noted here that while Care is available nationwide, it is not available in California anymore. Volvo dealers in the state successfully lobbied and got the DMV to force the program to cease operations, arguing that it was less a subscription and more of a direct-to-consumer sales program. Basically, the company was competing directly with its own dealerships, a violation of the California Vehicle Code.

Porsche Drive started in 2017. Only available in nine U.S. cities: Atlanta, Houston, Irvine, LA, Monterey, Phoenix, San Diego, San Fransisco, and San Jose. It’s in Canada as well but only in Toronto. With Porsche Drive, you can choose between a single or multi-vehicle subscription. If you choose a single vehicle subscription you can choose between one or three-month commitments. Multi Vehicle Subscriptions allow you to swap between every vehicle in the Porsche lineup except the Taycan—though the RWD Taycan will be made part of the Multi Vehicle Subscription package in May. (A previous version of this post stated that the 911 was not included in the Multi Vehicle Subscription. It is.)

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Of the 19 car subscriptions that were around, nine of them were offered through an automaker. Their fates are all similar:

  • Mercedes canceled its subscription around the same time Jaguar started its own. The company claimed it was testing the waters, but lackluster demand forced their hand.
  • BMW and Audi both ended their programs at the beginning of the year. Audi’s was only available in the Dallas/Ft.Worth area and the company hinted that a revamped version could be coming.
  • Book by Cadillac wound down its subscription program at the end of 2018 after struggling to find enough interested. Summer 2019 saw Cadillac announcing that a revamped version that was more dealer focused would be debuting soon, but nothing ever materialized.
  • Ford had a program called Canvas that launched in late 2017. Just over two years later Ford gave up because of a lack of demand. The business was picked up by a Santa Monica based subscription startup called Fair.
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Illustration for article titled Once Hailed As The Next Evolution In Car Buying, Car Subscription Services Are All But Gone
Image: FreshCar

What of the surviving, non-OEM subscription services? FreshCar is apparently still offering subscriptions and offering to help you start your own service. Operating only in LA, Borrow is an EV subscription that lets you choose between the Smart FourTwo, Fiat 500E, BMW i3, Hyundai Ioniq EV, Kia Soul EV, Tesla Model S or the Hyundai Nexo fuel cell car.

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Illustration for article titled Once Hailed As The Next Evolution In Car Buying, Car Subscription Services Are All But Gone
Image: Cadillac

What went wrong? None of these programs were widely marketed, most of them were never even widely available. Cost and limitations can be factored in as well. Many of these subscriptions were often not as cost-effective as automakers made them seem. For instance, a lessee looking at an Escalade at the time Book by Cadillac was operational would have found that even at a maximum of 48 months and 15,000 miles, one would come out over $700 cheaper leasing than subscribing. (Of course this isn’t factoring in the substantial down payment required with most leases).

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Multiple limitations didn’t help matters either: Mileage limits, conditions, initiation fees and more all hampered what was promised to be an easy click and drive experience.

Then, you have to wonder if most people who could afford one of these services would simply prefer to own or lease a car. Whatever the reason, the future for car subscription services doesn’t look quite as bright as some thought it would be.

Staff Writer at Jalopnik. Dad. Lover of all things with 4 wheels. Weird interest in buses.

DISCUSSION

Price price price. I’m not sure why they were all sky high. The only benefit of subscription services is the choice of vehicles and that is not compelling.