What is car subscription and the different types of subscriptions?
Most of us know Netflix and Disney plus subscriptions. Your children make you sign up and you think to yourself “I can cancel that at any time if I want to when they get bored with it” but you never do. Car subscription is not a new thing. I still remember a few years back Porsche Cars North America launched the Porsche Passport product. The whole point of a subscription is to give less capital upfront and flexibility to be in and out of different cars when you want.
So who are our typical customers at AAM Group (Alliance Asset Management Ltd) who require a subscription to our mobility services:
- The customer wants a Land Rover defender in the winter and a Porsche 911 convertible in the summer. This is where our longer-term solution with Mycardirect comes in.
- Customers who are on the waiting list for cars and need something for a period of months.
- A new employee working through a probationary period.
- Customers who want to test a Hybrid or electric vehicle before committing to buying one.
- In the case of our super flexible ONWRD platform, our customers may only need a car for an hour, a day, a week, or always need to make sure they have transport. That’s where our partnerships with Hiyacar and Jyrney come in.
- Then we have B2B long-term customers. At the moment we are finding that over 60% of our vehicles on B2B subscriptions are Electric.
- Lastly, we have customers who want the best deal and not necessarily the highest-spec car and will use our BestCarFinder solution.
- Customers who want choice. Because AAM has been in the space for 30 years, we can pretty much get hold of any car you want. We have petrol, diesel, hybrid, and electric, from a Fiat 500 to a Range Rover Hybrid or Audi RS Etron GT.
What to look out for
- Insurance. Really make sure you read the T&Cs. You could find yourself having a deposit locked away until a subscription platform has the time to sort out the insurance claim, which could be months.
- Some subscription platforms will only cover UK residents. At AAM Group we are able to cover non-UK residents.
- Age restrictions, if you are young, then don’t expect to be able to get in every car offered by platforms.
- Pricing – Subscription on the face of it might look more expensive than traditional PCP. However, take into consideration the all-in-one package, lower deposit, and flexibility.
- Too cheap to be true – There are a lot of deals out there. Just look for a Tesla Model 3 and you will see some really cheap deals. The key is in the detail around mileage restrictions and other added details, like exit clauses.
So that’s the basics. Plenty of choices out there and lots of options and t&cs to get your head around.
Chairman of AAM Group Ltd including MyCarDirect, ONWRD, Alliance Fleet and BestCarFinder
CEO and Co-Founder Pario Ventures investor in AAM Group