From Fair to Volvo:How Does a Car Subscription Work?

Jack R. Nerad | Feb 14, 2021

If you're in the market to buy or lease a car right now, you should know that you have another alternative. You can subscribe to a vehicle via a subscription service and say goodbye to the old hassles associated with owning or leasing a car. 

Care By Volvo Car Subscription Service

Of course, you might find that those hassles are replaced by other hassles that are just as bad. But before we open that can of worms, first you should know what a car subscription is and how a car subscription works.

What is a Car Subscription? - Find the best car deals!

At its core, a car subscription is a new take on an old business model with which you’re already familiar. You pay a monthly fee, and you get full use of a car with most or all of the ownership expenses rolled into the payment.

A car subscription relieves you of the many individual expenses and hassles of car ownership while delivering all the advantages of having a car when you need it. They typically include the payment, car insurance, and annual license plate registration fees. They offer flexibility, including the option of switching from one car to another with very little notice. Some toss in free maintenance, coverage for minor body damage, and more.

Car subscriptions work similar to other subscription services. For example, you might subscribe to cable TV, internet service, or a music service. Maybe you subscribe to a favorite magazine, a local newspaper, or access to an online publication. With the rise of entertainment services like Netflix and Hulu, and home meal-planning services like Blue Apron, the old-as-the-hills subscription model has taken on a new, contemporary sheen.

If you stop paying your subscription, you stop receiving service. And the same thing happens with a car subscription.

What Does a Car Subscription Do? - Find the best car deals!

Some people would tell you car ownership has its share of hassles. A car subscription is intended to eliminate those.

When you buy or lease a car the traditional way, the shopping and buying process is not exactly streamlined. With a car subscription, you go online, browse vehicles, pick one, remotely handle the paperwork, and then take delivery of the car at home.

Then there are the ownership aspects like repairs and maintenance, license fees, smog checks, and insurance. Many car subscription deals include all of these in the single monthly payment, simplifiying your life in the process.

Sometimes the car you own is not suited to what you want to do — say picking up a load of lumber from the home improvement store or taking a long ski weekend in the mountains. In the past, some car subscriptions offered the ability to switch vehicles at will when your requirements changed. Now, they tend to be more restrictive, but unlike with a lease, it is easier to cancel your subscription or switch it to another vehicle.

How Does a Car Subscription Work? - Find the best car deals!

While the particulars of car subscriptions vary all over the map, all share some key features and offer similar advantages and disadvantages. Convenience and flexibility are the key tenets of a vehicle subscription program. 

One of the most convenient aspects of a subscription program is the lack of drama and hassle in acquiring the vehicle in the first place. You can sign up very simply at a dealer, online, or by using the appropriate smartphone app. 

You’ll need to qualify, of course, by offering some personal data so the company can check your credit history. If you’re accepted, you set up an on-going method of payment, and you’re ready to start driving as soon as your car arrives.

Another convenience of a car subscription is an all-inclusive monthly payment. Instead of dealing with several monthly, annual, or regular payments, everything is rolled into a single payment. That will include the payment for use of the car, plus the insurance. It may also cover maintenance, repairs, and even roadside assistance.

Car Subscriptions Provide Flexibility of Choice - Find the best car deals!

Flexibility is expressed in two ways. First, the basic subscription model says you can cancel your subscription and walk away at any time. If you want to drive that car for just a few months you can, but if you want to drive it for a couple of years or more you can do that too. 

You should know, though, that as vehicle subscriptions have evolved the plans have typically grown less flexible on these terms. 

For example, one of the most successful programs, Care by Volvo, essentially requires a two-year commitment, although you can cancel and return the vehicle after as few as four months. Other services require a fairly sizable upfront fee that encourages customers to stay on the program to recoup that “down payment.”

Another area of flexibility is the fact that subscriptions can enable customers to swap one car for another. Say you want to drive a comfortable sedan or crossover day-to-day, but for the weekend getaway, you want a two-seat sports car or a mammoth SUV. 

This idea sounds appealing, but after trying this out the subscription services have found it difficult to execute in the real-world where things are always messier than in theory. 

In the current era of car subscriptions, it is possible to do a swap, but your swaps could be limited. For instance, you might be restricted to one swap during your commitment period. Or you might be confronted with a very narrow number of vehicles that you could change into. 

Car Subscriptions Inspired New Opportunities - Find the best car deals!

When the idea of subscribing to a car first caught on, executives at car manufacturers, auto dealers, car rental companies, and Internet startups launched a variety of car subscription services and apps. In each case, the companies were trying to figure out how to best serve customers and at the same time profit from the subscribe-to-a-car idea. 

The startups include the Fair app and Flexdrive. ZipCar and Car2Go have taken the lead in the car-sharing space. The traditional rent-a-car companies like Hertz, Enterprise, and National have looked into offering car subscriptions. Then you have car manufacturers that include (or have included) Audi, Cadillac, Lincoln, Porsche, and Volvo, among others. These automakers have offered subscriptions to individual cars in their portfolios or, in some cases, across their vehicle range. 

For many, this has been a "toe-dip," with service limited to selected markets. Some, most notably General Motors and its Maven car subscription app, have heavily scaled back or left the business entirely. Flexdrive and Fair altered their business models to rely heavily upon individuals who sought cars to drive for ride-hailing services like Uber and Lyft, and, of course, those businesses have suffered as well. 

It is unclear whether car subscriptions will continue in the future, though a few remain available.

What Companies Offer Car Subscription? - Find the best car deals!

Volvo has been the leader in car subscription among all the world's auto brands. It founded its Care by Volvo subscription option several years ago, and it has stayed with the program even as other manufacturers were bailing on theirs. 

Offered on several of its vehicles, Care by Volvo describes itself as a "24-month subscription lease program with an all-inclusive monthly payment." The single payment covers usage of the vehicle for up to 1,250 miles per month, maintenance, and other common services related to vehicle ownership including insurance coverage. Scheduled maintenance and tire and wheel protection for road hazards are also included in the monthly payment. 

In most states, the subscription can be canceled without penalty after four months. (In Illinois customers cannot cancel until 12 months, and insurance coverage is not offered in several states.) Excess mileage charges accrue if customers exceed the 1,250 mileage limit.

Fair is an app-based used car subscription service that continues to reinvent itself. It might not be "commitment-free," but it certainly doesn't require the commitment of a car lease or purchase. 

Fair is a flexible way to secure the use of a used car for a few months or even a few years. Fair functions in the place between daily rental and the much longer-term of a traditional lease. It's not designed to be used for a week or two, but if you are seeking the use of a car for three months or longer, Fair can provide the solution. 

Getting a vehicle through Fair is easy. The entire deal happens online through the Fair smartphone app. Depending on your location, the app presents you with an array of cars and their associated payments. You can fine-tune the parameters to match your desires. If you see a vehicle you like at a payment you can afford, you can finalize the deal on the app. Fair also offers a return policy for a full refund of your start payment, as long as the vehicle is in good condition. 

Flexdrive formerly worked with local car dealers to offer subscription services to vehicles in their inventories. 

While in some markets individual dealers continue to offer subscription services through programs similar to those of Flexdrive. Flexdrive itself is almost exclusively providing vehicle subscription services to rideshare drivers via its association with Lyft Express Drive. Broader consumer-oriented Flexdrive operations might be available in the Atlanta, Austin, and Philadelphia metro areas. 

Summary - Find the best car deals!

Subscribing to a car is not for everyone. In fact, as many car manufacturers and Internet entrepreneurs have discovered, it might be for far fewer people than they had hoped. 

The flexibility and short-term commitment that car subscriptions offer might be better handled by using a traditional short-term rental car provider like Enterprise or Hertz. And if you simply need a car for a few hours, rental cars and Zipcar are attractive alternatives. 

But if the idea of subscribing to a car appeals to you, investigate what's available in your area. Volvo and Fair are two good places to start.

Jack R. Nerad has covered car buying, auto retailing, and the automotive industry for more than three decades. He has held editorial director posts at dealership, consumer, enthusiast, and market research publications; appeared on television as a car-buying expert; and hosts a popular podcast. He is the author of several books, including The Complete Idiot’s Guide to Buying or Leasing a Car.

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