Initial plans typically change in the subscription world, so it behooves the consumer to wait and see how everything shakes out.
By Gary Guthrie
The automobile subscription playing field just got a little more crowded. Enterprise Rent a Car has announced that consumers will have access to its new car subscription service in the next few weeks.
The nuance in the Enterprise recipe is that subscribers have the option to exchange vehicles up to four times a month. Typical out-of-pocket expenses like insurance, registration, maintenance, roadside assistance, and satellite radio are all part of the deal, too.
Prices and locations have not yet been announced, but Enterprise told ConsumerAffairs it expects to unveil those sometime in the next 4-5 weeks. The company joins the ranks of Lincoln, Lyft, Mercedes, and others that have started their own car subscription service. Competitor AutoNation brought its own service to market last year.
Finding the sweet spot
Like most subscription services -- MoviePass, Netflix, and Spotify come to mind -- there’s likely to be some shake-out when it comes to how Enterprise’s plan will work when it finally finds its sweet spot.
For example, BMW wasn’t getting the consumer buy-in it was looking for and dropped its monthly minimum fee from $2,000 to $1,000. Shortly after, Lincoln found it tough to compete with BMW’s price drop and created a plan built around off-lease vehicles to be more competitive.
“With the anticipated compound annual growth rate (CAGR) of the global automotive subscription services market through 2022 at 71 percent, I would be surprised if Enterprise decided not to jump into this hot market,” Kathy Greenler Sexton, CEO & Publisher of Subscription Insider told ConsumerAffairs.
“These are still early days for a subscription automobile subscriptions, with many brands testing different packaging and even pulling these tests if they have faltered -- just look at Cadillac. That said, 46 percent of consumers surveyed have stated that they would prefer buying a vehicle subscription service over buying one and if that hold true and consumers embrace the subscription model, this may be the start of something big that Enterprise will be part of. It’s a natural next step for them. Not everyone’s buying into the auto subscription service.”
Predicting trends
One of those not buying in is automobile industry watcher Jack Nerad.
“There’s a lot of claptrap being thrown around the auto industry disguised as a ‘trend,’” writes Nerad.
“But none is getting as much attention as the supposed wave of near-future consumers who will subscribe to cars rather than purchase or lease them. Those promoting the idea point to the fact that subscription services for things like razor blades, skin care products and the ingredients and instructions for making dinner are really hot right now. They then extrapolate that trend to justify a belief that subscriptions for cars will be the next big thing. But I’m here to tell you it won’t.”
