- According to the Cox Automotive study, 25 percent of consumers ages 18-64 are aware of vehicle subscription services. While 10 percent of overall consumers said they will subscribe the next time they need a car, 16 percent of millennials said they would go this route.
- “While this form of mobility has only been around for a limited time, research shows that subscription is gaining traction among consumers, particularly those looking to forego traditional ownership,” said Isabelle Helms, Cox Automotive’s vice president of research & market intelligence.
- She later added: “Now, despite only having been available for a short period of time, already one in four consumers tell us they’re aware of car subscription services. For comparison purposes, consider that just over half of consumers are aware of car-sharing services, which have been around nearly 20 years. With that in mind, 25 percent’s not such a bad number,” Helms said.
The vehicle subscription market is still in its relative infancy, so perhaps it is appropriate that the segment has some eyeing the potential for massive growth and others with questions about its challenges.
But when it comes to weighing the pros and cos of subscriptions, Jennifer Reid of Equifax approaches it from the vantage point of, “Who’s the right fit?”
The benefits and drawbacks of subscriptions will depend on the customer using the product.
“I think the pros obviously are for the customer that is looking for something that they can have flexibility with, somebody who’s lifestyle’s changing, somebody that doesn’t want to have the long-term buying experience and what goes with that, things like maintenance; this is just a great option,” said Reid, who is a vice president with Equifax, in a phone interview.
“And I’ll tell you quite frankly, I’m one of those people,” she said. “I turn my cars over quite frequently. You know, I’ve been accused of turning my cars over more than my shoes.
“But when you think about it, what do those people typically fall into financially, right? If you’re not paying cash, you fall into an inequity position, and you get to own all the depreciation,” Reid said. “So, from a standpoint of those types of buyers that want to have a more frequent vehicle change pattern, I think it just gives a lot of safety, security and flexibility, and should be fairly stress-free.”