When it comes to all-inclusive financing options, Hyundai Capital America isn't putting all its eggs in one basket.
With pilots and partnerships, the captive is offering alternative financing and ownership structures in the markets seeking those options, while devising cost-cutting strategies to ensure subscriptions are financially viable for dealers and customers.
The captive began piloting a subscription payment option, Hyundai Plus, in Ohio that packages a special lease price, vehicle maintenance and auto insurance, which has since expanded to other states. And this month, the captive partnered with vehicle subscription company Flexdrive to develop financing models intended to reduce the costs of vehicle subscription plans for dealerships and customers.
In April, Hyundai Capital also launched Genesis Spectrum, a lease package that combines the car payment with auto insurance for one monthly fee. With the program, Hyundai Capital intends to simplify the payment process for customers seeking subscription-level flexibility without taking on the higher costs of subscription.
Hyundai Capital America is not the first — and is unlikely to be the last — captive finance company looking to reexamine customer financing options. The recipe for a successful subscription-type service could include a captive finance company at the wheel. Captives work closely with dealers and customers, Flexdrive CEO Jose Puente told Automotive News, and because they hold the risk on vehicles in their portfolio, they have an added incentive to reduce subscription plan costs.
To make subscription viable for dealers and their customers, captive finance companies should consider driving the solutions — and take risks when appropriate. Hyundai Capital has spread its subscription experiments among three programs, all with the dealer, customer and automaker in mind.
And as Puente said, captives have an incentive to reduce the cost of subscriptions. If a subscription ownership model presents a financial challenge for dealers or their customers, captive finance companies should be the first at the drawing board.