Many believe the future of cars is subscription ownership. In contrast to leasing, customers get access to a temporary vehicle but there is no down payment or final instalment, and the time period is on a monthly, not yearly, basis.
One player is Like2Drive, a subsidiary of Fleetpol, which offers a monthly all inclusive flat rate for cars to private and corporate customers. The subscription includes fully comprehensive insurance, vehicle tax, and maintenance, and vehicles can be rented for six, 12 or 18 months. The company recently struck a deal with AutoScout24 which is now offering Like2Drive’s car subscription model on its website, and shows how quickly the mobility model is taking hold.
Another player is Cluno which recently raised €140m in debt financing, after a funding round of €24m from Valar Ventures, Acton Capital Partners and Atlantic Labs. The new capital is being used to further accelerate its growth and technological offer. The company claims to be the only independent provider of a flexible and completely digital car subscription service in Germany. The whole process of making the booking, as well as credit checks and signatures, is carried out via an app.
US subscription app start-up Fair buys vehicles that a consumer might want to purchase and then enters into an agreement in which the driver pays for that car on a month-to-month basis. The cars are all pre-owned and Fair carries no inventory beyond what it has under contract with drivers. Last year Fair acquired the active leasing portfolio of Xchange Leasing, a service Uber first established in 2015 to lease new and nearly-new vehicles. Spanish player Bipi offers a monthly subscription service where you can lease a car from 10 days up to a month via its app.
Traditional automotive companies are also being drawn to the model’s attractions. Volvo offers a flat-rate model via its Care by Volvo platform which allows customers to drive a car without any minimum contract duration. VW has also entered this space via Volkswagen Financial Services, while car rental company Sixt offers a wide selection of different car models which do not have a fixed contract duration.