Vehicle Subscription Services on the Rise

The popularity of vehicle subscription services is on the rise, with more than half of all consumers surveyed by the Jim Butler Auto Group expressing interest in subscribe-and-drive services.

From the rise of autonomous vehicles to the arrival of digital vehicle subscription services, technology is changing the way consumers view and interact with their vehicles, according to the Jim Butler Auto Group, which today released findings from its 2018 Automotive Technology Survey.

The popularity of vehicle subscription services is on the rise, with more than half of all consumers surveyed by the Jim Butler Auto Group expressing interest in subscribe-and-drive services.

While consumers under age 55 showed the strongest interest in new, technology-enabled auto experiences overall, half of all survey respondents said they would consider subscription vehicle services that bundle the cost of a car payment, insurance and maintenance into one monthly service fee. In fact, 70 percent of 18 to 34-year-olds and 61 percent of 35 to 54-year-olds expressed an openness to this model.

“The increasing popularity of subscription services, paired with ride sharing, innovations in driving automation and e-commerce, are challenging established notions of vehicle ownership and the purchasing process,” said Brad Sowers, president of the Jim Butler Auto Group. “This has significant implications for brand loyalty today and the ways we will acquire and use vehicles tomorrow.”

The survey, distributed between Oct. 28 – Nov. 8, 2018, to more than 30,000 drivers nationwide, found advanced auto features weigh heavier than brand loyalty, with more than half of respondents saying they would be willing to abandon their preferred vehicle make or model to obtain the specific technologies they want. Half of all respondents said they would pay more for a vehicle that had the technology features they want.

Consumers not ready to turn the keys over to self-driving cars
While recent headlines suggest automakers are moving closer to fully autonomous vehicles, 72 percent of respondents displayed some level of discomfort with operating or riding in self-driving vehicles, and nearly 60% went further, expressing outright distrust of the technology.

Driver assist features, including hands-free calling, built-in navigation and lane departure warnings, fared better, with 60 percent or more respondents saying they were “somewhat” or “very” comfortable with the technologies.

Drivers age 18 to 34 showed the most openness to autonomous vehicles, with 60 percent in neutral to strong agreement with the statement, “I trust self-driving technology.”

“Right now, consumers are looking to technology to help empower their driving, but not necessarily to become the driver,” said Sowers. “With attitudes varying by age, fully autonomous vehicles could gain in greater acceptance over time, but for many consumers today, self-driving technology still seems like science fiction.”

While nearly 30 percent of consumers were neutral to very comfortable with riding in or operating a self-driving vehicle, only 19 percent said they believed flying vehicles would become commonplace in their lifetime. This belief was highest among 18 to 34-year-olds, with nearly 30 percent believing they would commonly see flying cars in their lifetime.

Enhanced digital transaction process could expand online auto sales
Despite the prevalence of e-commerce, just 9 percent of respondents have ever bought a vehicle online. Overall, consumers expressed greater comfort purchasing new vehicles versus preowned vehicles online (36 percent to 28 percent), with price, specific make/model and simplicity of transactions, and specific tech features ranking as most important factors to online new-vehicle buyers.

“Online or in person, the paperwork required to complete a vehicle purchase can be daunting to consumers, but it doesn’t have to be a complicated experience,” said Sowers. “With advancements in digital payment processing and convenient delivery options, we expect online auto purchasing to continue to grow.”

Building a progressive auto experience
Currently, the Jim Butler Auto Group is piloting new e-commerce capabilities, giving car buyers nationwide the ability to conveniently and transparently complete online purchases through its Jim Butler Kia, Maserati and Alfa Romeo dealerships.

The pilot follows the dealership’s October 2018 introduction of an automotive subscription service, driveBLACKTIE, which combines the convenience of technology with the new and pre-owned variety of the auto group’s $60-million inventory across eight Alfa Romeo, Chevrolet, Chrysler Dodge Jeep Ram, Maserati and Kia dealerships.

driveBLACKTIE’s mobile feature builds on the auto group’s technology strategy, which began with a robust e-commerce presence that has served car buyers in 32 states and has helped make Jim Butler one of the top 15 Chevrolet dealers nationwide and a recipient of the Chevrolet Dealer of the Year award three years in a row.

The Jim Butler Auto Group conducted the 2018 Automotive Technology Survey between Oct. 28, 2018, and Nov. 8, 2018, via social media and email to approximately 30,000 existing and prospective customers nationwide. The survey received a 2.6 percent response rate of 784 responses. Respondents were asked to identify themselves by age groups with 100 respondents (13 percent) identified as 18 to 34 years old; 289 (37 percent) as 35 to 54 years old; and 389 (50 percent) as 55 years old or older. Four respondents were disqualified from the survey for not fitting into these age ranges.