If you are a millennial, you may be among those who value time over ownership, so you may not be interested in buying car. But what if you could get a car without having to buy it, all for a flat fee that includes insurance and maintenance?
There’s a new route to car access emerging, and it doesn’t involve ownership at all. Instead, you subscribe to a brand. And who’s disrupting the auto industry? Turns out it’s the auto industry itself.
Micheline Maynard, a contributor to Forbes.com and editor of Curbing Cars, a blog that looks at the future of transportation says younger consumers don’t have the connection to car ownership that older people typically do. High student loan debt and urban lifestyles feed into a rejection of car culture, too.
“I think one of the things that’s going on too is that the other end of the market – boomers that are starting to downsize, moving from big houses in the suburbs to maybe a cool condo in the city – only have room for one parking space, They need something, but they don’t necessarily need to own something,” Maynard says.
High-end car brands are moving into the subscription arena, Maynard says. Luxury cars and newer used cars are prominent there.
“Some of the vehicles we’re talking about are 2014-2015 vehicles that have come back off lease,” Maynard says. “…In a normal world, the car companies would turn around and sell those off-lease cars to new buyers, but again, with the buyer thing, people are a little less interested in owning something on wheels.”
Maynard says car companies with big investments in factories and workers are looking for ways to get the most from the vehicles they produce, even in a time of lessened car enthusiasm.
Ride-hailing services, and short-term car rental businesses are affecting auto sales, Maynard says.
“The car companies want to just get you in their product somehow,” she says. “I also think that as people get used to not owning vehicles… then they’re less likely to own a vehicle again in the future.”
So far, only one Texas company offers car subscriptions. That’s in north Texas. Maynard says the state’s big cities, including Austin and Dallas, and possibly Houston, are the most likely markets. She points out that many Houston drivers lost cars during Hurricane Harvey, and might be looking for an affordable way to get back on the road.
Written by Shelly Brisbin.