What is a Car Subscription Service?

Book by Cadillac Escalade subscription ・ Photo by Cadillac

The traditional methods for getting a car are buying and leasing, but car subscription services offer a whole new way of having your own car. Car subscription services not only get you into a vehicle, but they also bundle in many of the expenses you usually pay for separately like insurance and maintenance fees, and they give you the opportunity to swap cars to fit your needs. This is a new idea with limited availability, but the variety of vehicles and number of regions where you can take advantage of car subscription services is constantly expanding. Here’s a rundown of how car subscription services work and why you might want to consider one the next time you’re looking for a vehicle.

Car Subscription Basics

A car subscription service is a new alternative to buying or leasing. Instead of a loan or lease payment, there’s a monthly subscription payment that bundles multiple fees into one. Exactly what is included depends on which car subscription service you use. There are some offered directly by automakers like Cadillac and Volvo, while others are offered by third-parties or even dealers. Pricing structures vary depending on who offers the service and the types of cars available. There are flat rate plans that put a new car in your driveway on demand and more flexible plans with fees that change depending on the vehicle you choose and the number of miles you plan to drive in a given month. While automakers generally offer new vehicles, third-party services and dealers often have fleets of vehicles that are anywhere from new to a few years old.

Photo by Volvo

Costs Vary

The monthly fees vary depending on the car subscription service and can go from affordable to quite expensive. Book by Cadillac was one of the first automaker car subscription services and it costs $1,800 per month. This gives you access to select new Cadillacs and lets you swap cars 18 times per year so there’s lots of flexibility if you can afford the price of entry. Porsche Passport is priced even higher with a starting price of $2,000 per month. Other car subscription services are more affordable. Care by Volvo starts as low as $600 per month. Canvas, which offers only Ford products, has an à la carte pricing structure that can keep you enrolled for as little as $400 per month and even lets you forgo a car while remaining subscribed for as little as $50 per month. Third-party and dealer services offer even lower prices.

Photo by Porsche

Mileage Limits Vary in a Good Way

Much like with leasing a car, most subscription services have limits as to how many miles you can drive. Some services have you choose your mileage at the start of each month and charge accordingly. If there’s a month where you don’t plan to drive as much as usual, then you can drop the mileage down and save on that month’s fees. On the other hand, if you plan to drive more than normal, then simply up the mileage for that month and you’re covered. Other services have a set amount of mileage allocated on either a monthly or yearly basis with no ability to change how much you can drive depending on your needs. If you stray over set mileage limitations, then you’ll be paying a fee to cover the additional miles just like you would with a lease. A few programs, including Porsche Passport, have no mileage limits at all. There are also those that charge a fee by the mile with a different rate depending on the car you drive.

Photo by Cadillac

Insurance Offerings: Read the Small Print

A typical car subscription includes insurance coverage as a part of the monthly fee. This insurance complies with the minimum requirements dictated by state and local laws and isn’t an option for most services. However, a program named Fair offers an exception to that rule. It lets you use your own insurance to cover the vehicle or you can purchase insurance through Fair directly if you meet its requirements. Although a subscription service includes insurance, it’s important to take a close look at the policy so you know exactly what kind of coverage is provided. Remember, there’s no guarantee the policy will cover as much as the insurance policy you have now. It might have higher deductibles or lower limits of liability. Talk to your insurance agent to be sure you understand the terms of the policy the car subscription service provides.

Photo by Canvas

Maintenance, but Not Damage Included

Maintenance costs are covered when you use a car subscription service, but before you get too excited, consider how much you’d pay for maintenance otherwise. There aren’t typically huge maintenance costs when you buy a new car, so although this sounds great, the savings might not be as much as you think. Also note that exactly what is covered depends on the car subscription service you choose. Some cover things like worn out tire treads, but a tire puncture is still your responsibility. Normal wear and tear might be okay, but anything beyond that could cost you at the end of your subscription so be sure you understand the difference. You can also incur extra charges for any damage to your vehicle, so clipping a curb and destroying a tire rim will cost you. Check carefully to see exactly what is and isn’t covered to avoid any surprises at the end of the subscription term.

Swapping Cars is the Fun Part

One of the most appealing aspects of car subscription services is the ability to swap cars. Unlike a lease, which has you in the same car for a set period, car subscription services allow for more frequent car swaps. Book by Cadillac includes 18 car swaps a year for no extra cost. Care by Volvo requires a two-year commitment and only lets you swap out after the end of the first year. Ford Canvas allows swaps once a month, so it’s more flexible, but there’s a $99 charge for each swap, and the cars can be as old as a 2015 model year.  Third-party services similarly offer swaps at various intervals. Carma lets you swap out cars as often as every 30 days. Yoyo is perhaps the most flexible choice for those who want to frequently swap their cars. It lets you change vehicles anytime you choose without having to pay any additional fees.

Photo by Cadillac

Limitations Include Pets, Smokers, and Other Drivers

Since you aren’t buying a car, but rather using it for a set period, it will eventually go back into the fleet for other people to drive. This makes it important that the car ends up back with the subscription service in good condition. To ensure they can reuse your vehicle, there are often limitations and restrictions about how it can be driven. Pets may be required to stay in a pet carrier rather than being left to roam free. Return the car with pet hair and expect to pay an extra cleaning fee and any repair costs from damage caused by your pet. Smoking is another no-no for some car subscription services. If you return the car smelling of smoke or any other unsavory aromas, you’ll be on the hook for a cleaning fee to get rid of the stench. Some services put limits on who is authorized to drive the vehicle, so don’t assume the whole family can hop behind the wheel. And don’t plan to drive over the border into Canada or Mexico as this isn’t allowed with every service.

Photo by Clutch

Availability is Limited

Since the whole idea of car subscription services is new, availability is limited. The good news is this is an expanding business model so existing providers plan to expand their services with demand and new services are regularly joining the ranks. If you happen to live in California, then you have the widest number of choices by far, but there are car subscription services available nationwide. Third party providers can be found throughout the U.S. serving major markets like Los Angeles and Austin, but some serve smaller metro areas. If there’s not a car subscription service that fits your needs in your area right now, just give it time and there likely will be soon.

Photo by Volvo

Automaker Programs are Few, but More Coming Soon

The number of automakers offering subscription car services is increasing, but for now, there is a small roster of available choices. They include Book by Cadillac, which was early to the game and currently serves Dallas, New York, and Southern California. Ford Canvas is available only in San Francisco and Los Angeles while Porsche Passport can be found only in Atlanta. Care by Volvo is the only automaker with nationwide coverage. They’re available everywhere, but the only vehicle currently available is the all-new 2019 Volvo XC40. That’s all for now, but more automakers are waiting in the wings. Lincoln has plans to launch its own subscription plan this year and both BMW (Access by BMW) and Mercedes-Benz (Mercedes-Benz Collection) said they have plans to test subscription services in the U.S. by year’s end. If this small selection of automakers doesn’t offer what you need, give it time and that will change.

Photo by Volvo

Third Party Programs

Third-party car subscription services fill in the coverage gaps and also overlap in some areas with services offered by automakers. Clutch is a Porsche partner that covers Atlanta with a more affordable plan. It’s unique in that it doesn’t let you pick your exact vehicle. Instead, you tell them your vehicle requirements and they deliver one that fits your needs. They also operate Drive Flow, which covers Winston-Salem and Raleigh in North Carolina. Carma is a subscription service that offers vehicles solely in Detroit. YoYo is currently available only in San Francisco but hopes to expand. Its service is a bit different than what others provide. There’s an initial enrollment fee with additional charges based on a per mile rate that varies depending on the vehicle. These smaller services are popping up all the time so it’s good to search periodically to see what’s new in your area.