Paying a premium on top of a premium
Are Any Car Leasing Subscription Plans Actually Worth It?
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Cadillac will “pause” its BOOK subscription service at the end of 2018. The company could reanimate the idea in the intermediate to long-term future. But, for now, BOOK is as good as kaput. That’s not too surprising. American car subscription models, as presently conceived, stink. They are expensive. They fill a hyper-specific niche that does not really exist.
The reasoning behind subscription plans is clear. Carmakers are rebranding as savvy, au courant tech firms. With pushy dealers and byzantine paperwork, the car buying experience is primed for disruption. There should be an app for that. The trouble is the current apps meeting any reasonable usefulness threshold.
Manufacturer subscription plans are ludicrously expensive. The idea – tapping your iPhone on a whim and having a gassed-up 600-horsepower performance beast replace your practical crossover – is simple. Providing that service requires substantial infrastructure and overhead. Improved tech can’t bring down that cost over time. Scaling up would prove an even greater challenge.
Customers absorb those bloated costs. BOOK by Cadillac subscribers were paying $1,800 per month — a lot by any measure. Even in the Cadillac realm, that’s a lot. We’re talking $400-plus more per month than a reasonable financing deal on a CTS V, the most expensive car in the BOOK fleet. Cadillac’s plan was far from the most costly. Top tier plans for Porsche, Mercedes, and BMW meet or approach $3,000 per month.
Paying a premium on top of a premium may not feel absurd if the affluent get something in return. But, what exactly are they getting?
Variety? That could be the spice of driving life. But, how spicy is it? Even the most bowled over fanboy would get a bit bored swapping one BMW for another after a while. That weekend where all life’s practical concerns float away for some intimate time with the sport coupe? Probably not going to be a regular event. One suspects most users probably spend the bulk of their time with the crossover they would have leased anyway.
Volvo offers novelty with Care by Volvo. You can subscribe and get a new Volvo as soon as every 12 months. That model works for iPhones. A Volvo is not an iPhone. One year makes far less difference in the car world. There’s little benefit to frequent renewal. Losing the residual value from the vehicle costs far more than not having an outdated phone at the end of your deal.
A subscription plan eliminates some minor ownership annoyances, sure. You don’t have to clean. You avoid that onerous once-a-year-or-so call to the insurance company. You don’t have to get your plates renewed. Is that extra convenience worth thousands more per year?
The company that “disrupts” the car buying experience will make it more efficient, more affordable and more tailored to the modern urban driver. None of the present plans do that. They offer the absence of commitment at a very steep markup. That freedom, for the few in select locales that even have the option right now, is not worth the expenditure.