Own, Lease, or...Subscribe?

Why your vehicle maintenance and the cost of new tires might be a thing of the past.

It’s fitting that Ford is the company developing an innovative solution to the changing landscape of auto ownership. After all, Henry Ford is the person who first brought the opportunity for auto ownership to the average American, releasing the Model T in 1914. By 1930, the number of registered drivers in America was 23 million, and over the next 80 years, we saw the standard of one car per driver become commonplace for many middle-class Americans. For those who had more money than time, leasing offered a hassle-free transportation arrangement.

But the birth of Uber in 2009 changed everything. No longer were Americans who didn’t own or lease cars faced with the sole alternatives of public transport, high-priced taxis, or shamelessly bumming rides from friends and family. Suddenly, the carless masses could call for a private driver, who would arrive within minutes and deliver them to the doorway of their destination - at a bargain price.

Cue the arrival of Lyft, Waze, Sidecar, Getaround, and a host of other alternatives to owning, leasing, busing, etc. But riding (and driving) with strangers comes with a host of new problems, as we’ve all heard by now. So with all of the technology we have at our fingertips, in a world where we can launch luxury cars into space “just because”, where will everyday transportation go next?

Subscriptions

Yes, subscriptions, like your grandma’s TV Guide, those Justin Bieber fan magazines, or monthly boxes of more toys than your dog will ever need. Except, this is a subscription you’ll actually use. Porsche and Cadillac have been offering vehicle subscriptions which allow drivers to change cars like they change outfits; however these run $3,000 and $1,800 per month, respectively. Not exactly attainable for most of us.

Ford is, true to form, bringing the vehicle subscription to the masses. As many millenials react by rejecting everything we’ve been told we’re supposed to want, trading oversized mansions for tiny homes, automobile companies wonder when car ownership will be on the chopping block more than it already is.

Ford’s solution is simple, affordable, and all-in-one. For $400 per month (their base price), subscribers check out a pre-owned vehicle to keep 24 hours a day, and are covered by comprehensive insurance. Maintenance, registration, and roadside assistance are provided by the company, and subscribers select a plan according to the amount of mileage they need, not unlike the data plan you choose for your smartphone. Just one year old, Ford already has 600 subscribers in the two markets they serve.

Other companies such as Fair have experimented with this idea - but Ford has the knowledge and resources to take Breeze, a Southern California startup they acquired, and make it work. Canvas, as Ford has christened it, is currently available in West Los Angeles and the Bay Area, with plans to expand as success allows.

Who else is hopping on this bandwagon? Volvo and Audi for starters. Different companies offer features such as simple in-app checkouts, the ability to swap models as needed, and more. Where will the vehicle subscription go from there?

“Our mission is to identify, test and launch financial products that meet the changing needs of consumers,” explains Canvas CEO Ned Ryan. David McClelland, Ford VP of Marketing and Sales, agrees that flexibility is key. "Multiple cars, multiple customers, variable term, variable payment. This is how we stay relevant in the world."

So, what’s next? Well, that just depends on what we want.

Elisa Meyer writes for Onlineautodealered.com and At Your Pace Online, where auto dealer pre-license classes and continuing education are convenient, easy, and affordable.