According to a June 2024 PwC survey, some 49% of British consumers are now considering a car subscription as an alternative to purchasing or leasing a car.
Flexibility is a primary motivator for 38% of respondents, who seek shorter commitments to newer cars. Some 33% of survey respondents were attracted to the simplicity of a fixed monthly rate that covers all expenses, while 29% value reduced car maintenance and depreciation.
David Bailey, professor in business economics at Birmingham Business School, maintains that younger drivers, in particular, are attracted to subscription services over traditional purchase or leasing options. “Car subscription services have taken off in Europe, especially with younger drivers,” Bailey says. “They give drivers more flexibility and choice. The cost of full ownership can be prohibitive for younger buyers in big European cities especially once insurance is factored in. Here car subscription offers the use of your ‘own’ car without all the hassle of full ownership. It is part of the 'mobility as a service' movement which is taking off.”
Jesper Hill-Kjærsgaard, CEO of the car subscription service :Dribe, notes that several big players in the British automotive industry are showing interest in their business model.
“We're seeing an increasing number of dealerships exploring new revenue streams to accomodate the change in technology and consumer behaviour,” he says. “Many see subscription models as a catalyst for both growth and retention. The industry is recognising the opportunities presented by a plug-and-play solution that enables implementation of a subscription service without significant investments. Automated processes and streamlined digital management reduce the need for manual labour."
David Bailey sees this as a natural response to market demand.
“I’m not surprised car subscription services like :Dribe are getting lots of interest in franchise type set-ups,” Bailey says. “There is a gap in the market for fleet managers to use this type of service. Across Europe, the market is set up to grow substantially in the future.”
According to David Bailey, growing interest in car subscriptions among dealerships is also linked to the new options they offer for electric vehicles. “Car subscription services like :Dribe offer a low-risk way into consumers 'dipping their toes in' and using EVs for the first time. This is going to be key I believe in encouraging wider EV take up,” he says.
:Dribe CEO Jesper Hill-Kjærsgaard also highlights the high purchase cost of EVs. “The significant upfront cost of electric vehicles, driven by pricey batteries and cutting-edge technology, can pose a financial challenge for many consumers. Coupled with the uncertainty around future resale values, subscription models provide a flexible way to embrace the future of mobility without making a heavy financial commitment - meeting the evolving needs of today's consumers," he says.
