Vehicle subscription programs are creating a market for consumers who don't want to buy a car or truck or lease it for an extended period. Even in their infancy, the programs are changing the way dealership service departments operate.
Subscription services offer new and late-model vehicles that customers can exchange frequently for others in a program's fleet. Repair and maintenance of subscription vehicles are often — but not always — tied to a franchised new-car dealership. Some aftermarket providers also work with operators of subscription programs to service cars and trucks.
The St. Louis area was not an initial test site for automakers' subscription plans. So Lou Fusz Automotive Network, which operates 11 dealerships that sell various brands, created its own program in metro St. Louis.
Randy Harman, the program's manager, says customers pay $950 a month to subscribe. The program, which initially included 50 vehicles, is preparing to offer a "prime tier" that will cost $1,450 a month and will include more "upscale" vehicles, Harman adds.
Cars and trucks in the program are "serviced at their respective franchise service departments as needed," Harman told Fixed Ops Journal.
Those vehicles will, for the most part, be under warranty, Harman says.
"The goal is to retire them when they come close to the end of their warranty period," he says. "They will be sold back to our dealerships and sold in our used-vehicle operations."
Fusz Select will handle service visits, including detailing, and leave another vehicle with the subscriber in the meantime, Harman says.
Flexdrive, a joint venture of Holman Automotive Group and Cox Automotive, operates a subscription program in the Philadelphia area.
Holman operates Cadillac, Audi and Ford- Lincoln dealerships in the region.
The program includes 100 vehicles. Bob Hughes, the service manager at Holman Ford-Lincoln in Turnersville, N.J., says his shop works on two or three Flexdrive vehicles each week, providing largely express service.
"We haven't been making appointments for these cars unless there are issues," Hughes says. Flexdrive trained the dealership's service advisers to keep track of when a subscription vehicle is scheduled to be returned, he adds. Subscribers are notified by text, email or phone when it is time for an oil change and tire rotation.
Cox Automotive developed a proprietary platform for Flexdrive, adds Jeremy Paolone, vice president of technology operations for Holman's strategic ventures division.
He says dealership service departments can profit from taking part in subscription programs.
"When we build Flexdrive subscription pricing, we assume we are going to have to pay retail rates for maintenance and repairs," Paolone says.