The uncertainty brought on by COVID-19 has led to consumers opting for new alternatives to car ownership – and it seems value and flexibility are the key motivators for change.
Car subscription service Loopit has seen a massive 52% increase in enquiries from dealerships wanting to integrate subscriptions into their business – and the brand is now ready to expand beyond local shores.
“The COVID-19 pandemic saw new car sales at an all-time low and led to increased interest in subscription from dealerships wanting additional revenue,” Loopit co-founder Michael Higgins told the Daily Telegraph earlier this week.
“Our technology has already proven a success across Australia, and we’re excited to bring this innovative solution to dealers in New Zealand.”
The rise of subscriptions is appearing to offer genuine appeal for fleets and organisations who can use the model to switch vehicles more easily and enjoy the convenience of a fixed weekly fee inclusive of insurance, rego, servicing and roadside assist.
For individual drivers, subscriptions mean there is no longer a need to buy a car outright, which can be especially helpful during a pandemic like COVID-19 where regular cashflow is severely hampered.
The situation is not too dissimilar over at Carbar, with CEO Des Hang indicating that the subscription model will play a huge role in 2021 and beyond.
“If I had to put money on it, I’d wager that in a post-COVID-19 world more services will become subscription-based – things that we never imagined [will] be a subscription too.” Mr Hang said.
Data collected by Carbar in September last year found that because of the higher price of EVs, 69% of respondents indicated that they would prefer to drive an EV via a subscription model – far ahead of traditional methods of purchasing a new car such as finance (11%) and purchasing outright (5%).
Last year, AfMA spoke with another emerging car subscription provider – Carly – about what the future of car subscriptions holds for Australia and for the fleet and automotive industries as a whole.
In 2020, despite COVID-19 the brand saw record growth – something CEO Chris Noone said is significant for both fleets and individuals alike. You can re-listen to the interview below: