Car subscriptions: hype or strategic opportunity for dealers and rental companies?

What is a car subscription?

A car subscription is a formula whereby the customer gains access to a vehicle for a fixed monthly price, including insurance, maintenance, and other costs. The main difference compared to traditional leasing lies in the flexibility: customers can often cancel on short notice, switch vehicles, or adjust their subscription.

That aligns perfectly with how customers think today: less in terms of “ownership,” and more in terms of a predictable monthly cost and ease of use. Research by McKinsey, for example, finds that more than half of customers start from a monthly budget rather than a specific car.

Also read the article: The decline in car ownership: what it means for our mobility?
 

Why are subscription models interesting for dealers and rental companies?

The relevance of subscriptions is confirmed by clear market signals in Europe. For instance, the subscription market is growing at a rate of approximately 25% per year, significantly faster than traditional leasing (approximately 7%). The total market for flexible vehicle models (leasing + subscription) could evolve to approximately 94 billion euros by 2030.
In addition, approximately 31% of European consumers are open to a subscription model. Deloitte even expects that more than 10% of new vehicles could eventually be sourced via subscription models.

For dealers and rental companies, there is another important additional benefit: subscriptions work strongly as an acquisition channel. In practice, it has been shown that up to 80–90% of subscribers are new customers for the brand.

In other words: subscription not only generates revenue but also opens the door to new target groups that classic leasing or purchasing does not reach.

sources: deloitte.com , McKinsey.com , mynewsdesk.com , motorfinanceonline.com , changemaker.org.uk

 

What are the most important success factors?

Although the opportunity is great, European data clearly show that success does not come automatically. The models that work share a number of distinct characteristics.
 

1. Flexibility
   Flexibility is the most important factor. Approximately 40% of customers consciously choose a formula with short and adaptable contracts instead of a classic leasing contract.
2. Simplicity
   In addition, customers expect simplicity. Approximately 65% ​​prefer an all-in monthly price without hidden costs. The strength of a subscription therefore lies not in complexity, but precisely in transparency.
3. Low entry threshold
   The entry barrier must also be low: more than 90% of successful models work without significant upfront costs.
4. Speed
   Finally, speed is a decisive factor. Digital onboarding and fast delivery (within 1 to 2 weeks) are increasingly becoming the norm.

sources: astuteanalytica.com

What are the main pitfalls?

Just as important as what works is what doesn't work.

1. Too little distinction from leasing
   A first common mistake is positioning subscriptions too close to leasing. Long contracts and limited flexibility actually undermine the core value of the model.
2. Profitability challenges
   Studies show that residual value risk (especially for electric vehicles) is under pressure and poses a significant challenge for providers. Therefore, be sure to include residual value risk in your business case and calculate somewhat more cautiously, particularly for electric vehicles.
3. No clear agreements between OEMs and dealers
   With Volvo's “Care by Volvo” subscription model, it became apparent that subscriptions could clash with the traditional dealer model. Dealers were concerned that the OEM was selling directly to customers via the subscription, thereby sidelining them. This led to resistance and even legal disputes in some markets. Ultimately, Volvo had to adjust its approach and review or outsource parts of the model.

sources: businesstalksweekly.com , mynewsdesk.com

Conclusion

Subscription models are not a temporary trend, but a logical next step in the evolution of mobility. They cater to a clear demand for flexibility, simplicity, and use over ownership. For dealers and rental companies, the opportunity lies not only in an additional product, but in a new way to reach and serve customers. Those who succeed in offering a flexible, transparent, and user-friendly model can leverage subscription models as a powerful lever for growth, both commercially and strategically.

At the same time, the successful rollout of such models also requires the right operational support. Consider the efficient management of contracts, vehicles, availability, and costs in a single central system. Solutions like ProPlanner help dealers and rental companies keep this complexity under control and make subscription models scalable and profitable.