Emerging trend for subscription cars sees all costs bundled into one monthly payment
New research by Volkswagen Financial Services UK has found that 61 per cent of people aged 18 to 34 would prefer car access via subscription over traditional private ownership.
With subscription cars, all the costs needed to run a vehicle are typically bundled into one monthly payment, and unlike other models of ownership, users simply hand the car back when they cancel their subscription.
Desire for subscription cars appears to decrease with age, with just 39 per cent of 35 to 44 year olds saying they’re interested in a subscription service.
This drops further among people aged 45 to 54 (26 per cent), people aged 55 to 64 (18 per cent) and people aged 65 to 74 (11 per cent).
Volkswagen Financial Services UK’s data insights team suggests this indicates a clear generational gap in attitudes towards the digitilisation of not just the automotive industry, but of consumer behaviours generally.
Earlier this month, Volkswagen Financial Services AG announced plans to develop and implement car subscription models for selected brands in the Volkswagen Group across Europe.
The car subscription models for the Group brands will be developed on the basis of individual customer needs, brand identity and the respective product range, and by 2030, around 20 per cent of revenue could come from subscriptions and other mobility offerings.
The move is indicative of an evolving market, with recent industry research showing that in the UK alone 31 per cent of drivers want flexibility to change their vehicle to suit their mobility needs, whilst 22 per cent are interested in a subscription that allows access to various models from the same brand.
Volkswagen Financial Services UK launched its Rent-a-Car platform in 2018, which allows users to rent a vehicle for a week, a month or longer – offering a choice of vehicles, options and insurance cover for all its customers.
Mike Todd, CEO at Volkswagen Financial Services UK, said: “The way that people buy and rent cars is fast evolving and we need to make sure that, as our customers continue to engage more with digital technology, we make their online journey as simple and as convenient as possible.
“Subscription models are becoming increasingly central to how we consume content, food, and almost everything in between, so it stands to reason that people – particularly younger people – are interested in accessing vehicles in the same way.”