It’s become conventional wisdom that the automobile will go through more changes during the next five years than it has the last 50. That goes for the car-buying process, as well.
Millions of Americans are already leasing, rather than buying, and others are opting for “nearly new” certified pre-owned rather than new vehicles. Still more may opt for more radical solutions, including new subscription services like the one Cadillac introduced earlier this year.
Dubbed “Book by Cadillac,” it allows a customer to choose from a menu of different models, switching from products like the XT5 sport-utility vehicle to the big XT6 sedan as often as 18 times a year. The subscription model was launched in New York and is now rolling out in two other major U.S. markets, Los Angeles and Dallas.
“Since Book by Cadillac was first introduced, we’ve seen widespread enthusiasm and demand from consumers who are seeking ways to complement traditional methods of buying or leasing a vehicle,” said Melody Lee, the project’s global director. “Introducing the service in Los Angeles and Dallas is a natural evolution of the program.”
(Are you ready to “subscribe” rather than lease? To see the story, Click Here.)
Automakers are betting that motorists want alternatives to the conventional retail experience, and technology like the smartphone has made it even easier to offer new shopping options. Leasing has become particularly popular among luxury buyers looking to stretch their dollars. But for those with a bigger budget, the subscription model is showing promise.
In Cadillac’s case, a customer pays a flat monthly rate of $1,800, along with a $500 one-time initiation fee. The service is open-ended, unlike a traditional automobile contract.
For the money, a buyer can switch in and out of a wide range of Caddy models, including the XT5 and Escalade SUVs, the big CT6 sedan and its plug-in variant, as well as the high-performance ATS-V and CTS-V models. All Book products come in premium trim and Caddy also is promoting the fact that the CT6 will feature its new hands-free Super Cruise technology.
A buyer will simply use a special Book app and a new vehicle will be delivered to their home, office or any other location.
Cadillac launched the Book service in New York last January, suggesting that it would expand the subscription program to other regions if it was well-received in the Big Apple. It’s now plugging into LA and Dallas, two major luxury markets. The latest announcement suggests further growth is in the works.
(Click Here for more about the Porsche Passport program.)
Caddy isn’t the only automaker experimenting with a subscription program, however. For Porsche fans who can’t decide between the classic 911 sports car, the Panamera sedan or the big Cayenne SUV. No problem there, either, at least if you’re living in Atlanta, where the German automaker has set up the pilot Porsche Passport program. For as much as $3,000 a month, customers can switch between as many as 22 different Porsche models pretty much whenever they want simply by using a smartphone app.
Volvo is going with a subscription approach for the new XC60 model. But while it offers a flat monthly rate that includes insurance, taxes and title, there’s no ability to swap models. It does, however, let a shopper upgrade to a new Volvo model at a later date.
While state franchise laws generally require dealers to be involved in new vehicle sales, manufacturers – as well as third-party vendors – are looking at still other retail alternatives, including online sales. Hyundai has launched a new guarantee program that even allows buyers to return a vehicle they don’t like after three days.
(To see more about “Care by Volvo, Click Here.)
But perhaps the biggest change could become apparent in the coming decade. Many analysts are betting that with the arrival of fully driverless vehicles the cost of using a ride-share service will drop so sharply that millions of Americans may abandon car ownership entirely.
