Fewer Americans own a private automobile today than they did a decade ago, according to statistics from the U.S. Department of Transportation. This trend, sometimes referred to as “peak car”, is commonly explained by pointing to social-media-obsessed young people who are delaying getting a driver’s license and buying their first car. Some analysts suggest that car-sharing and ride-hailing services provide a more convenient alternative to getting around than car ownership. But — maybe it’s deeper, a fundamental shift in consumer mindset about the hassles associated with car ownership.
One of the newest and most powerful innovations is the monthly car subscription. Imagine gaining access to a vehicle without having to ever step foot in a car dealership, haggle with a car salesman, visit an auto mechanic, shop for car insurance, worry about breaking down, or periodically buy auto parts or a new set of tires. Each one of these tasks requires money and attention, but most of all precious time we could use more thoughtfully. Besides, for many of us who lack a deep expertise in the art of negotiating a deal and the finer points of auto maintenance, buying and owning a car leaves us vulnerable to those who might take advantage of our gap in our knowledge. What adds insult to injury is the fact that a car is a depreciating asset. You might like that new-car smell, but the moment you drive a car off the dealership lot, the vehicle’s value has dropped by 10–20%. How about leasing? While a relatively low monthly lease payment might seem attractive, it’s only an alternative ownership scheme in which the depreciation is baked into the deal. Dealerships, as a standard practice, obviously modify the terms of the lease deal, such as the mysterious “money factor” in every lease contract, to their benefit.
Today we stream media rather than buying DVDs and CDs. We get clothes, food, and toiletries regularly delivered rather than trudging to the mall. Now, thanks to car subscriptions like AmeriDrive, you can shop online for a car, make your selection, and pick it up the very same day. Time-savings and convenience factors alone are winning over new generations of drivers. The cost for a monthly car subscription, usually in the neighborhood of $400 to $500, includes maintenance, unlimited miles, and roadside assistance. Compare that to the $706 monthly average cost in 2017 for owning a car, if you drive 15,000 miles, according to AAA. That $706 doesn’t include depreciation, which in the first year alone can represent as much as 30 percent of the car’s value.
Today’s new breed of customers are leading this revolution, but automakers are not far behind. Smart industry leaders have been quick to shift their business model from vehicle manufacturing to becoming so-called mobility providers. The monthly Canvas service operates as a subsidiary of the Ford Motor Company, just one of about a dozen automakers offering a subscription service.
There’s Got to Be a Better Way
Click here to find out!