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Can you get a car subscription from a car dealer?

Clever software allows car dealers to provide subscriptions on any of their vehicles, turning inventory into monthly revenue

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If you’re interested in a car subscription, The Car Expert’s partners can help
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Car subscriptions are considered to be the Next Big Thing for car sales, offering short-term contracts with no up-front deposits to offer customers maximum flexibility.

Your monthly payments is notably higher than for a traditional lease or PCP car finance agreement, but you don’t have to provide thousands of pounds up front, and you can generally walk away with only a month’s notice and no penalty fees – rather than being locked in for up to four years with huge penalties for cancelling early.

Right now, the number of subscriptions is small, but growing quickly. And unsurprisingly, there are plenty of businesses trying to establish their niche in this mushrooming marketplace.

Currently, most of the operators work much like a regular leasing company, where you can choose a vehicle (either new or used) from what’s available and have it delivered to your door.

But there’s another option that could change how you fund any new or used car, and that’s taking out a car subscription directly through a car dealership. This model is already seeing huge success in markets like Australia, and is now starting to be rolled out here in the UK.

How does it work?

A clever software platform from a company called Loopit (which is one of our commercial partners here at The Car Expert) allows dealers to set up their own subscription service in a matter of days, then start renting out any of their vehicles to customers.

Car dealers already provide company cars to their employees as well as loan vehicles to service customers, so they’re certainly used to managing a fleet of vehicles. But by adding a subscription service, they can take any vehicle in stock and lease it to a customer for a matter of weeks or months.

This opens up all sorts of possibilities for dealers, as well as providing another option for customers. And we’re very much in favour of giving customers as much choice as possible.

A much-needed opportunity for car dealers

The last couple of years have shown that consumers are increasingly happy to buy new and used cars online, without ever setting foot in a dealership.

The growth of online platforms (and, let’s face it, you’ve been able to lease a new car completely online without going to a dealership for well over a decade) poses an existential threat to car dealerships. This is particularly a problem for independent traders who are not affiliated with a major car manufacturer.

Meanwhile, millions of customers who would prefer to go to their local dealer to find their next car have been automatically excluded from the burgeoning subscription marketplace until now.

So the opportunity for dealers to operate their own subscriptions programme, whether small or large, could be game-changing. Essentially any car in stock can generate recurring monthly revenue for as long as necessary, then sold on later.

For dealers with new-car customers facing long waits for delivery, there’s an opportunity to buy the part-exchange vehicle now then earn income from a short-term subscription on another vehicle until the new car arrives. You can set the monthly payment at whatever level you like, so you can work out a deal that suits your business and your customer.

Flexibility for both dealers and customers

Offering a subscription option allows dealers to manage their inventory between full payment for a sale and recurring income for a subscription, adjusting the balance to suit current business needs.

Obviously, this has a massive consumer benefit as well – which is what we’re all about here at The Car Expert. The potential for a customer to visit any dealership and choose any new or used car for a short-term subscription on a rolling contract will be an attractive prospect for many people.

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Stuart Masson
Stuart Massonhttps://www.thecarexpert.co.uk/
Stuart is the Editorial Director of our suite of sites: The Car Expert, The Van Expert and The Truck Expert. Originally from Australia, Stuart has had a passion for cars and the automotive industry for over thirty years. He spent a decade in automotive retail, and now works tirelessly to help car buyers by providing independent and impartial advice.