Car ownership is changing

Is subscription the future?

Photo by George Levai on Unsplash

Mr Dilly looked very pleased when he turned into his drive, opposite ours in leafy Byfleet. He was driving a brand new mark 2 Ford Cortina, a boxier shape than the one Dad had.

I was out on my bike, playing with Sean and we immediately crowded round as he got out. A new car arrived on their drive every couple of years, a perk for being a travelling salesman. It didn’t go unnoticed that this was only the Deluxe edition and not one of the more expensive Super or GT models. I was jealous of Sean, who was now proudly sitting in the driver’s seat of his Dad’s new car, being told not to touch but still holding the wheel and being able to breath in that delicious new car smell.

Cars unlike houses, were really important and I prided myself on knowing many of the cars on UK roads in 1968, most of which were of local origin.

By the time we moved to Merseyside, I had started to take an interest in our number plates as well. Mum inherited JKB 386D, Aunty Majorie’s Morris Minor and Dad’s LMB 822L, Austin 1800, proved to be far more reliable than the brand new Wolseley 6, JFM 902N, he took delivery of later. It was immediately sent away to be Ziebarted, sprayed underneath with some rubber compound to protect it from rust. It seems unbelievable that a new car, didn’t come fully protected and guaranteed against UK winters.

Cars reflected a salesperson’s status

I spent most of my working life as a travelling salesperson, although the titles got fancier - Key Account Manager, Business Development Executive, National Account Manager. The cars and the labels on the boot, GLS, GL , LX was not just a perk, it was a barometer on performance.

The perk quickly disappeared for many, replaced with a company car allowance, when company cars became an ever more onerous taxable benefit.

Falling out of love with the motor car

When Mrs H and I moved to London, our perfectly pleasant Audi and BMW were returned when their leases expired. We were in no rush to buy new cars and instead bought new bicycles.

My interest was only rekindled because of the pandemic, climate change and the opportunity to rent an electric vehicle (EV) on a short term basis. I wanted to try this new technology without concern about battery life limitations or financial implications trying to sell an EV with a less than perfect one.

I found Onto (electric car hire) to be as cost effective as any lease arrangement with a commitment limited to 28 days. A testament to its success is I’m still saying yes to another month, 12 times now, since I took delivery of their new Hyundai Kona. They’ve recently been in touch to arrange its first service. Another benefit - it’s their problem, not mine.

Subscription is becoming a way of life

Most of us have become familiar with subscription services. Some like mobile phone and gym membership have been around for a long time. More recently, where would we have been in lockdown without Netflix, Spotify and Amazon Prime, the latter providing food as well as entertainment, when supermarket shopping seemed to be more precarious than a routine shop.

We now subscribe to Grubby, vegan recipes in a box. Skipping weeks is an anticipated part of the user experience. You can even subscribe to services like Harry’s, making sure fresh shaving supplies turn up on-time to remove your stubble.

I can’t speak for Harry’s, but the convenience of Grubby and Riverford has converted us to a voyage of plant-based discovery. It’s all in the box and even comes with a Spotify playlist so you can discover new music as you cook. The fact that we don’t want to spend time looking high and low for tamarind, agave or harissa in the supermarket, in pack sizes more suitable for a decade’s use is compelling.

These services come at a premium, but we’re also throwing out a lot less food and we have the convenience of delivery to our front door, fresh and ready to cook.

Do the young even have a choice?

The need to leave home and escape the clutches of Mum and Dad is important for every generation. It’s also never been more challenging, as the British love affair with house ownership continues unabated. Demand has driven prices to unaffordable limits for far too many.

Given that an even greater percentage of disposable income now goes on rent or a mortgage, if you can get one, it’s not surprising that young adults are less likely to tie up cash in a depreciating asset like a car, especially if they live in a town or city where public transport alternatives exist. (How good those alternatives are is not always guaranteed).

Loopit (car subscription platform software) found in their research of 1,000 consumers that 68% of younger drivers would consider a subscription service, 20% more than older respondents. If the young aren’t prepared to try something new, who is?

Subscription comes bottled in different forms

Subscription is being offered by traditional rental companies, fleet providers, independents like Onto, Cazoo, Elmo (there are more) and car manufacturers. The most active manufacturers I’ve found are Volvo and Pivotal (Land Rover/Jaguar), although neither brand are going to inspire younger drivers and if you’re not 30, you can’t play anyway.

The benefit is an all-inclusive fixed price, a commitment period as low as a month, meaning you only pay for it when you need it. It’s likely to be a new or nearly new car and if you want to try something new, like an EV, this is the easiest and most convenient way.

It also comes in app form, which is one of the biggest benefits of all. It’s as easy as buying from Amazon and having such a low barrier to entry is why car subscription services will ultimately become popular.