DETROIT -- As more dealers try their hand at vehicle subscriptions, Mobiliti CEO Chance Richie urges them to think of a subscription as a standalone profit center rather than a lead generator for other revenue streams.
"We take a lot of pride in helping our dealer partners make sure they're making money every month on the subscription," Richie said during a panel discussion here.
The Automotive Press Association hosted the panel Tuesday to explore the business and consumer benefits of subscription services and the rising demand for an alternative to traditional vehicle ownership.
Mobiliti, an app-based subscription service headquartered in Detroit, loops dealers into the subscription service realm and provides fleet service financing through its partnership with Ally Financial.
The company has 25 employees, about 100 dealer partners and 1,000 users. Mobiliti's monthly subscription fees range from $550 to $1,200 and cover insurance, maintenance and roadside assistance.
Building subscription pricing models around depreciation characteristics, the biggest driver of subscription costs, will produce positive selling experiences for dealers once vehicles are done being used for the service, according to Richie.
"By and large, it's going to be driven by vehicles that have the shallowest depreciation," Richie said. "It's Jeep Wranglers, it's Toyota, it's small SUVs -- those are generally the things that work really well."
The wide spectrum of brand options is the stark advantage dealers hold over auto brand subscription plans, such as Lincoln's Canvas or Audi Select, but dealers must have the workers and resources to sustain the business model, panelist Ryan LaFontaine told Automotive News.
With 17 dealerships scattered across Michigan, LaFontaine Automotive Group in Highland, Mich., has the advantage of being more accessible to potential customers, said LaFontaine, the dealer principal.
"Do I think it's going to take over the industry? I don't," he said. "Do I think it's going to be a piece of it, an opportunity for consumers? 100 percent, and that's what I want to be ready for."
During the panel discussion, LaFontaine said his dealership group has not partnered with Mobiliti but is at a stage where it's "ready to go" with the company's platform.
He told Automotive News: "Before I just jump in, especially us being [an] 80 percent leasing market, I'm trying to let other markets kind of go through the test pilot and get more data to show me what vehicles really are being successful, not just from a consumer demand but also from an economics" standpoint.