Wheels on demand: The latest news from the car subscription business 

We’re back with another edition of our car subscription newsletter, which highlights the latest trends and some of the best reads we’ve identified for the month. It’s another month of progress, with many cars subscruption companies making exciting moves to expand their business. Check out the latest headlines from the industry, all compiled in one easy-to-read blog post for your convenience.

The latest news from around the globe 

The car subscription industry is growing worldwide, with new players entering the market and existing participants attracting millions of dollars in investment. Our first stop is in Switzerland, where car subscription platform Carvolution has secured €25 million in working capital provided by Zuger Kantonalbank. Carvolution will use the funds to expand its fleet of vehicles and accelerate growth.

French car leasing company Arval has launched a joint car subscription model with MG Motor in Germany. This move is a response to the growing  popularity of car subscription as an alternative to car ownership, financing and leasing. The new offering, known as “MG Auto Abo powered by Arval,” provides customers with a flexible contract term and the benefits of Full-Service Leasing.

Over in the UK, Nissan has become the latest brand to offer a car subscription option. The Nissan Subscription offers an all-in-one payment plan for customers. This covers the car, insurance for up to five drivers, road tax, all scheduled servicing and roadside assistance. The only additional costs are fuel or electricity.

What’s new in EV subscriptions? 

With consumers in many parts of the world interested in exploring electric vehicles (EVs), this space is a major driver of the global car subscription market. In one interesting development, the UK’s Wagonex is advocating car subscriptions as a way for leasing companies to create revenue from EVs returned at the end of a leasing term. This could help these companies address the rapid depreciation in value of EVs.

Also in the UK, the EV leasing group Onto is seeking new investors after one of its major partners stopped injecting funding into the business. Insurance company Legal & General told Onto that it would not put additional money into the business. Onto has, to date, raised more than $350 million to fund its growth.

What’s driving the trend towards car subscriptions?  

Just Auto interviewed Trent Broberg, CEO of automotive logistics platform ACERTUS, for his perspective on the growth of the car subscription industry. The article highlights rising interest rates and lack of vehicle inventory as reasons consumers are moving away from owning a vehicle in favor of other options. It notes that the global car subs market is forecast to reach $15.6 billion by 2030.

Another piece from Mahindra identifies a few reasons the concept of car subscriptions resonates with younger drivers. The article notes that car subscriptions are finding favor because they give young drivers flexibility rather than tying them into loans or leases with long terms; plus, consumers don’t need to go through the hassle of loan applications and arduous credit checks.

In-car feature subscriptions—not as hated as everyone thinks? 

Our last snippet is about subscriptions for in-car features such as heated seats or remote-start key fobs. Most consumer research to date suggests that people hate them. But a new report from S&P Global Mobility finds that 82% of US consumers who had experienced a free trial or an existing subscription would at least consider purchasing subscription-based premium services on a future new vehicle.

That’s a wrap for this edition. We’ll be back next month with even more interesting updates and stories to share.