Clutch Technologies is taking a different approach by working directly with car dealers to leverage their entire inventories. Clutch Technologies
The Clutch Subscription Platform

New Subscription Service Lets Dealers Leverage Any Vehicle On The Lot

Clutch Technologies’ multi-vehicle subscription platform uses dealers’ existing inventory to provide customers everything from short-term loaners to extended test drives – and dealerships with additional revenue and retention.

As mobility options such as ride-sharing and car-sharing erode individual vehicle ownership in certain areas, automakers are investing in these services to shore up revenue and keep up with tech-driven transportation trends. Another option OEMs are exploring to get customers in their cars and also into dealerships are vehicle-subscription services.

But these have all been from luxury brands, with limited availability – and success. In fact, General Motors suspended its Book by Cadillac vehicle subscription service in late 2018, although the luxury flagship says it’s planning “future expansions.”

There’s no shortage of startups to fill in the OEM gaps by offering vehicle-subscription services of various lengths and a variety of cars. But startup Clutch Technologies is taking a different approach by working directly with car dealers to leverage their entire inventories of new and used vehicles to meet drivers’ needs – and hopefully turn them into loyal customers.

Clutch, which was acquired by Cox Automotive in September 2018, launched in Atlanta in 2014, first establishing a “lab” to provide a vehicle-subscription service to several hundred consumers. This led to several dealerships using Clutch’s subscription platform in 2016 as well as the subscription service Drive Flow, followed by OEMs including Porsche, BMW and Mercedes-Benz in 2017 and 2018.

More than 20 dealerships in the U.S. currently use Clutch’s Single-Vehicle Subscription platform. “Along the way, some of our dealer customers said they have loaner cars, used cars, rental cars and asked us to build a subscription platform for multiple vehicles,” says Vince Zappa, president of Clutch. The company’s new Clutch Subscription Platform to fill the need for multi-vehicle subscriptions “was born from that request,” Zappa adds.

Dealers also asked Clutch to allow consumers to easily switch between vehicles. For example, Clutch’s Subscription Platform enables extended test drives on a paid basis so that customers can try one or more vehicles for any length of time before deciding whether to buy.

“We were seeing some of our our dealership customers using OEMs’ multi-car subscription model to offer an extended test drive,” says Zappa. “The consumer would keep running the subscription or would just buy the car they wanted.”

Another way the Clutch Multi-Vehicle Subscription allows dealers to satisfy customer needs is through on-demand rentals of specific vehicles. As an example, Zappa points to someone who needs a pickup for a home-improvement project or owns an electric vehicle but wants to take a long road trip without having to worry about charging and range anxiety.

“This allows the consumer who needs transportation on a very temporary basis to leverage a fractional subscription model,” Zappa adds. “Dealers can marry each purchase with access to a range of vehicles, such as an SUV or a truck.”

Other features of Clutch’s Multi-Vehicle Subscription model include:

  • Short-term single-vehicle subscriptions to fill the gaps between leases or provide transportation for temporary residents.
  • Fractional subscriptions that allow a dealership’s customers to drive additional vehicles for a monthly fee. Zappa says this could be sold by a dealership’s F&I department or after a purchase and combined with a service contract that includes pickup and delivery.
  • Single VIN subscription that allows dealers to monetize excess used-vehicle inventory to serve as a “used lease” or to supply vehicles for people in the “gig economy.”

“Multi-vehicle subscriptions are the toughest problem to solve from a software perspective, and all the coordination required from both a fleet and operational perspective,” Zappa says. “But we think there's an opportunity for dealers to sell access to a pool of vehicle on an ad-hoc basis.”

Zappa believes this gives dealers the opportunity to create not only additional revenue but also increase retention by shifting from transactional to continuous relationships.

“If dealers and OEMs establish ongoing relationships, learn what is needed from consumers and provide ongoing value, the result will be a virtuous circle of retention and profitability, regardless of the specific products a consumer is using,” he says.

Clutch Technologies

TAGS: Technology
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