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Auto Nation is "dealer of record" for subscription service Autonomy.

Vehicle Subscriptions May Be Down But Not Out

A global consulting group predicts the practice is inevitable.

The vehicle subscription model has failed to catch on in the U.S., as evidenced by high-profile failures in the space.

“Vehicle subscriptions are the kind of things that seem like good ideas at first but, later, not so great. Certainly, there are a handful of consumers who might want to change cars frequently, but most prefer the lower price and hassle-free idea of just owning or leasing a car,” Brian Moody, executive editor at, tells Wards.

But not everyone is convinced vehicle subscriptions won’t work. Startups and automakers continue to offer variations on the subscription theme, betting that the model will catch on. And dealers, including AutoNation, have partnered to offer them.

The subscription model is common in non-automotive segments, such as media and music, and automakers are now testing the waters, offering subscriptions for certain features, such as heated seats.

In a vehicle subscription plan, however, a consumer generally is allowed to use a vehicle for a short period – from a few days to a few months – for a fee that includes registration, insurance, maintenance and, often, roadside assistance. The key is ease of entry and exit of car usage.

That may not be a compelling selling point, says Ed Kim, president and chief analyst at consultancy Auto Pacific.

“I do think that the subscription model may have a future, but the advantages that subscription programs are currently using as talking points, such as the ability to swap into new vehicles often and no long-term contracts, may not have broad customer appeal,” he says.

There have been some high-profile vehicle subscription flops. They include GM’s Book by Cadillac, launched in January 2017 and “paused” less than two years later, and Ford Motor Credit’s Canvas, launched in 2017 and acquired by Fair in 2019. Fair’s vehicle subscription service also failed to gain traction. It later changed its business model to an online marketplace and was itself acquired by Shift, an online used-car marketplace.

Europe has provided more fertile ground than the U.S. for vehicle subscriptions and startups. For example, Finn, a German vehicle subscription platform with a minimum subscription of six months, raised $110 million in May 2022 to expand in Europe and enter the U.S. market.

The market for vehicle subscription services is expected to be strong globally, with a compounded annual growth rate of 23.1% between 2020 and 2030, when it will reach $15.56 billion, according to Straits Research. North America is forecast to account for $6.8 billion of that market, with a CAGR of 24.4%. BCG, formerly known as Boston Consulting Group, recently released “Driving Success in Car Subscriptions,” a report that predicts vehicle subscription services are inevitable. “Over the next few years, the boundaries between subscribing, renting and leasing will become even more blurred. Each will be just another way of accessing a vehicle – another point along the ownership continuum,” says the report.

Its three rules for subscription success are knowing customer priorities, including the right price, the right vehicle selection and a great customer experience; knowing the subscription customer (hint: they aren’t all young urban hipsters); and mastering the unit's economics.

According to the BCG report, factors that have contributed to subscription service failure include lack of a clear value proposal; lack of understanding of value chain complexities and vehicle lifecycle requirements; lack of a solid remarketing plan; and a bad digital experience.

Automakers attempting vehicle subscriptions often have no clear idea of where subscriptions fit into their overall strategies, the global consulting company says.

Georg Bauer sees the rise of electric vehicles as a tipping point for vehicle subscription services. Bauer, who co-founded Fair, is now co-founder and CEO of another subscription startup, Autonomy. His current startup is based on the assumption that “the time is right now for subscriptions in connection with EVs,” Bauer tells Wards. “The future of transportation is going to be electric.”

Autonomy offers only EV subscriptions, which can be as short as one month, with free cancellation after that with a 14-day notice.

Bauer says Autonomy assumes demand for EVs will persist for “years to come” and that each EV in its fleet will have multiple drivers. It will keep the vehicles in use as long as they are covered by a manufacturer’s battery warranty, which can be up to seven years, he says. “It gives us a handle on the residual value risk,” says Bauer.

For remarketing, Autonomy has partnerships in place to sell the vehicles in its fleet, says Bauer. For example, in mid-2022, Autonomy signed an agreement with the publicly listed dealership group AutoNation. As part of the agreement, AutoNation acts as Autonomy’s “Dealer of Record,” and it will assist Autonomy in EV acquisitions. AutoNation’s 300-plus U.S. dealerships will also activate subscriptions and take care of maintenance and returns. Those dealerships can also buy some of the used EVs, says Bauer.

There are a handful of seemingly successful – thus far – vehicle subscription services operating in the U.S. besides Autonomy. They include stand-alone companies and companies owned by auto manufacturers. A division of Sixt, a German car rental “mobility” company, offers short-term vehicle subscriptions in the U.S.

Among automakers, Care by Volvo and Stellantis’ Free2Move offer vehicle subscriptions. That suggests there is a place for subscription services in the automotive ownership continuum.

Volvo Cars see it that way. “We see Care by Volvo as an additional tool in the retailer toolkit: cash finance, leasing and subscription,” a Volvo spokesperson says. “With a heavy focus on customer experience at Volvo, making sure we can do business on the customer’s terms is critical.”


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