Jan 17, 2023
Get ready to start seeing more subscription-based features in the auto industry. Automakers could offer subscription-based access to features like heated seats, remote start fobs, etc. The idea behind these subscriptions is that it will allow buyers to “test-drive” some features for a few months, then decide whether or not they’d like to continue using them. That way the owner can spread out the cost of pricey options into smaller monthly or yearly payments. This concept is currently being offered by some luxury carmakers, and it is expected to become more common throughout the industry in the future.
On the positive side, car subscriptions may extend warranty coverage for the length of features’ subscriptions. Plus, dealerships will most likely provide over-the-air upgrades long after the vehicle has left the lot. However, consumers will still pay for equipment that comes installed with the vehicle, whether they use it or not.
However, car subscriptions also raise some concerns for consumers. One being that automakers may take advantage of customers by increasing the feature’s price over time, forcing buyers to pay extra for safety features, or even taking options away. To avoid this, clear regulations and guidelines need to be put in place to protect consumers.
Another concern is that automakers may decide to disable certain features due to the cost of major software updates, as it has happened in the past. There are speculations that companies will deactivate proven, effective, well-functioning safety systems when the subscription expires, such as automatic emergency braking (AEB) with pedestrian detection, forward collision warning (FCW), and blind spot warning (BSW).
Luxury models are more likely to secure subscriptions for features, as they are often leased, which makes it easier to incorporate additional fees into a monthly payment. Examples of car subscriptions today include Tesla’s “Full Self Driving,” Cadillac’s Super Cruise ADAS, and Audi’s Function on Demand. The sales professionals will need to be crystal clear which features require a subscription, otherwise they might end up getting sued by consumers who weren’t told about the additional fees.
Car subscriptions offer a new way for car buyers to access features and technology, but they also raise concerns for consumer safety. It is crucial that clear regulations and guidelines are put in place to protect consumers from being taken advantage of by automakers. As the trend towards car subscriptions continues, it will be important for consumers to weigh the benefits of buying versus subscribing to options, and be aware that they may end up with a recurring payment even if a car is paid off.