Manufacturers are backing off from subscription – short-term flexible contracts, offering customers the ability to switch or hand back vehicles with little notice.
Often colloquially referred to as ‘Netflix for cars’, the format was popularised at the beginning of the decade and has been championed by some providers as a revolutionary way of accessing vehicles.
Autocar contacted seven OEMs advertising subscription products and asked about the format’s progress. Four did not respond, one could not provide an answer, and a source at another told us it had stopped offering cars via subscription.
Volvo, which did respond, was previously one of the format’s most vocal advocates and, during a press video call in February 2023, CEO Jim Rowan said subscription was “here to stay”, after a 49% year-on-year uptick in 2022.
However, a spokesperson told us via email that its switch to the agency sales model from June this year meant that “subscription doesn’t have the same focus it once did for us, as we now sell direct regardless of finance method. Whereas in the first part of the year, subscription was our only direct channel”.
We also asked the Association of Fleet Professionals if any of its members were sourcing vehicles via subscription. It said it was not aware of any who were.
Cazoo and the reality of costs
Subscription was tipped to be the next big thing in motor finance, and many predicted it would be supercharged by online used car retailer Cazoo, which bought a series of European subscription companies, including UK-based Drover in December 2020 for £65.4 million, which it rebranded under its own name.
After listing on the New York Stock Exchange for an astonishing £6.5 billion in August 2021, those predictions were not to be, and the firm closed its subscription arm in June 2022.
A common argument against subscription is its comparatively high cost compared with conventional leasing, so we examined the difference. In October, we found a Nissan Qashqai Acenta Premium advertised on subscription specialist Wagonex on a 12-month/10,000-mile contract, including maintenance, for £558.33 per month excluding VAT.
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