Are Car Subscriptions the Next Big Thing? Here's What to Know Before You Subscribe

Car subscriptions are gaining in popularity. Should you consider subscribing? Here’s what you need to know before jumping in.

It seems like there is a subscription service for everything these days. You can order a meal subscription, a snack subscription, a coffee subscription, a plus-size fashion subscription—there's even a mystery subscription for this spookiest time of the year. So why not for cars?

SUVs, for example, cost a lot more money than smaller cars—but what if you only want to drive one occasionally? Perhaps you need one for road trips in the summer, or for your kid's baseball season, but the rest of the year a sedan works just fine. Car companies have been attempting to roll out their own versions of the popular subscription model for a while, and many consumers are very interested. An Adtaxi study found that, in fact, 66 percent of car shoppers would be into the subscription model.

Some car subscription services and manufacturers—including Volvo's—already brand themselves as a convenient alternative to traditional car ownership. However, regular Joes and automotive experts (myself included) alike tend to feel that a subscription like this is a luxury service—one that isn't usually the financially prudent choice.

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Here are some things you should know before subscribing for your next car.

The Types of Car Subscriptions Available

Styles of subscriptions vary from program to program. Some allow you to replace your vehicle monthly, others every week, while others don't allow you to switch your vehicle at all.

Volvo offers Care By Volvo, which is one of the farthest-reaching subscriptions services, operating across the United States except in California, Hawaii, Mississippi, North Carolina, North Dakota, and South Dakota. (They do have a different version of the program in New York.) Volvo's program only provides subscribers with brand-new vehicles every time.

Nissan recently started a more budget-friendly program called Nissan Switch, but it's currently only available in Houston, Texas. Porsche offers both Porsche Drive subscription and rental in select major cities across the country.

Most car subscription fees include the car itself, maintenance, repairs, and even car insurance. Some include a limited amount of "damage waiver," road hazard for any damage to your tires (such as leaking air from running over a nail, or blowouts), as well as roadside assistance.

Who wants a car subscription service?

Car subscriptions are pricey and you don't build any equity. At this point, I'm still convinced that the subscription services are not for the average car buyer; they feel like a luxury service with a luxury price tag. While that may change in the future, it's very much the case at the moment.

"They [car subscriptions] tend to be a lot more expensive than buying or leasing a vehicle, and fewer and fewer automakers are still offering them," says Keith Barry, auto writer at Consumer Reports. "A subscription like Porsche Drive would let someone try out driving a sports car like a Porsche 911 when they want to, but drive a more practical luxury SUV when they need the extra space."

Even if the expense doesn't dissuade you, it might not be a fit for your needs—or you may not be eligible. Most car subscriptions have a cap on the number of miles you can drive, so if you do a lot of driving, buying a car might be the best option for you. Subscriptions also require you to be eligible, typically by passing both a credit check and qualifying for the program's car insurance. If you have multiple traffic infractions, such as DUIs, or subpar credit, you may not be eligible to subscribe.

However, there is a definite shortage of vehicles available for purchase right now, which has led to skyrocketing car prices. Investing in a short-term subscription service for a few months while prices stabilize might (the keyword being "might") make sense if the numbers add up.

The Future of Car Subscriptions

While customers seem to be interested in the car subscription model, vehicle manufacturers don't seem to be extremely successful at keeping their programs running. Perhaps it's the cost, the limited number of brands that currently offer them, or simply due to subscriptions not being widely publicized (and available only in select cities when they are).

Whatever the reason, a revamp and redirection is likely necessary before the car subscription model becomes a long-term and real option for a wider swath of car buyers—or would-be subscribers. Of course, that doesn't mean that vehicle manufacturers won't try to develop other types of subscriptions—in addition to or instead of car subscriptions—given the widespread interest in, if not accessibility to, the model.

"Instead of paying for, say, navigation or adaptive cruise control upfront as an option that you paid for once, you'd subscribe to the feature when you needed it," says Berry. "Porsche, Tesla, and others are already trying out subscription plans for their advanced driving assistance systems, and in Europe, some automakers are even turning options like heated seats into monthly subscriptions."

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