The Economic Perspective: “Auto Subscriptions”

I’m Mary Walden with economist MW, welcoming you to the economic perspective.  Today’s program looks at car subscriptions.  Mike, you and I are old enough to remember when there were only two ways to use a vehicle – purchase it, or borrow it from you parents.  A couple decades ago leasing a vehicle emerged as an option.  Now there’s something new I’m hearing about – auto subscriptions.  What are they?

Mike:  Summary Answer

  1. Pay a monthly fee to use vehicle – fee covers everything – insurance, maintenance, roadside assistance
  2. Major feature is its flexibility – can change vehicle with just a couple days of notice – often dealer will bring you the other vehicle
  3. No down payments or financing charges
  4. No negotiating – fees are set
  5. Short commitments – some subscriptions can be as short as a month
  6. But, often not guaranteed a new vehicle; restrictions on mileage and how use; and user may be tracked so dealer knows where vehicle is at all times
  7. But, another options
  8. I’m MW

Mary:  And I’m Mary Walden for the Economic Perspective, an NC State Extension program from the Department of Agricultural and Resource Economics.