Car subscription is a bundle of rolling short-term leases (since you can change the car more often than in the usual lease), maintenance, and insurance.
Cars today, by and large, have lower maintenance demands than any time before (my 3 year-old Buick has set me back an average of maybe $25/month for (all dealer-performed) maintenance, including $50 a year to mount and unmount snow tires). So the cost difference between the subscription and a standard lease is attributable to the extra flexibility and the bundled insurance, to the extent that the median number of car changes desired per year is far less than 12, this seems like a recipe for adverse selection.
It could work if customers' expectations about maintenance costs are stickier than the costs themselves. But yeah, that's a big factor—why prepay for something that's getting cheaper all the time?
Car subscription is a bundle of rolling short-term leases (since you can change the car more often than in the usual lease), maintenance, and insurance.
Cars today, by and large, have lower maintenance demands than any time before (my 3 year-old Buick has set me back an average of maybe $25/month for (all dealer-performed) maintenance, including $50 a year to mount and unmount snow tires). So the cost difference between the subscription and a standard lease is attributable to the extra flexibility and the bundled insurance, to the extent that the median number of car changes desired per year is far less than 12, this seems like a recipe for adverse selection.
It could work if customers' expectations about maintenance costs are stickier than the costs themselves. But yeah, that's a big factor—why prepay for something that's getting cheaper all the time?
Do car subscriptions not work? Or does BMW not work? Not a company I'd want to overgeneralize from
https://news.ycombinator.com/item?id=25527121