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UFODrive car sharing service in Berlin offers Tesla EVs.

Lease Transfer As Key Mobility Component

The person getting out of their lease can walk away when they want, and the person taking over the lease can “subscribe” to that lease contract with remaining terms suited to their needs.

Ride sharing and mobility-as-a-service continue to captivate consumers. Managing mobility and subscription programs is top of mind for automotive executives today, leaving many to wonder how offering similar programs of their own might expand their competitiveness.

This is wise when you consider the opportunity of program growth, as well as consumer demand. Cox Automotive’s recent Evolution of Mobility study reports four of every 10 persons say access to transportation is important, but not necessarily through personal vehicle ownership. Another one-third say they are open to transportation methods that don’t involve owning a vehicle.

Public perception of transportation is changing. Consumers may not necessarily be looking to eliminate personal vehicle ownership altogether, but they’re looking for on-demand transportation options that don’t involve the vehicle they lease or own. This directly aligns with subscription-based services that have gained popularity, like Hulu or Netflix in the entertainment industry.

Automakers such as BMW and Mercedes-Benz have been at the forefront of car-sharing programs. Those two companies jointly have rolled out their Share Now program, enabling users to share 20,000 cars in 30 cities across the world. While this may seem small, it’s a well-defined program that will only grow.

Lexus, Toyota and Ford have looked to join the car-sharing segment, understanding consumer tastes are changing and they need to develop programs with their dealers that meet these needs.

It’s not surprising these brands are embracing subscription programs, as all have thrived under the earliest form of vehicle subscription known as car lease transfership. These programs were developed more than 20 years ago when many consumers were looking for ways to rid themselves of their lease contract by transferring the lease to someone else.

It feels like a subscription because the people getting out of their lease can walk away when they wanted, and the person taking over the lease can “subscribe” to that lease contract with remaining terms suited to their needs. An example could be a person wanting a 10-month lease because his or her job was changing, or someone who wanted to try out a truck for several months because their family was expanding.Scot Hall Swapalease.jpg

Brands such as BMW, Mercedes-Benz, Lexus, Toyota and Ford all have benefited from lease transfer. Customers aren’t looking to escape the brand; they’re looking to escape the lease because a model no longer fits their changing lifestyle.

Brands avoiding or resisting lease transfer risk losing customers who may become frustrated with their lack of transfer options and ultimately switch brands at the completion of their leases.

It’s time for these brands to provide the freedom and flexibility drivers have sought over the past two decades. Failure to do so will place them at a competitive disadvantage at a time when the broader industry is going through a much more elaborate evolution with complete dealer-enabled car-sharing programs.

Scot Hall (above) is executive vice president-operations at, which has been helping people get in and out of car leases for more than 20 years.

TAGS: Dealers
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