Dealerships often make room in their inventory at the end of the year for new makes and models of cars, making the holidays a good time to buy but a rise in consumer interest in the variety that subscription-based auto manufacturers offer is revolutionizing the industry.
“An increasing number of customers are looking for unique finishes and colors,” said Harry Kasparian, chief marketing officer with Nissan Kendall, a dealership in Florida. “People – on the whole – are changing cars more.”
According to Edmunds data, the month of December has the year's highest discount off manufacturer's suggested retail price (MSRP), about 6.1% on average, and the highest incentives.
“I would go for the ever-reliable Honda Accord, a car with a great history,” Kasparian told Newsmax Finance. “Luxury cars are also a joy to drive so I would consider the Mercedes GLE. In the truck category, a RAM 1500 is always a good choice.”
Drivers can potentially experience driving all three types of cars in one year by enrolling in a subscription vehicle services program.
For example, there’s Care by Volvo and Cadillac Book 2.0 in which subscribers pay an upfront fee of $500 and then a $1,800 monthly fee that includes insurance and maintenance. In exchange, subscribers can switch the car they drive as frequently as every thirty days.
“It’s not so much a matter of if, but when, customers will overwhelmingly demand subscription-based services,” said Gary Brooks, chief marketing officer of Syncron.
According to a Syncron research report, about 60 percent of respondents indicated fixed monthly cost, including maintenance and repairs, as the biggest advantages of vehicle subscription services.
The Care by Volvo subscription program has been so successful that the California New Car Dealers Association (CNCDA) filed a petition on behalf of car and truck dealerships with the state’s New Motor Vehicle Board to stop the manufacturer from offering subscription model cars, alleging that the program usurps the traditional sales role of Volvo dealer franchises.
“Volvo admits in internal documents and in documents provided to consumers that the Care by Volvo transaction is a lease,” states the complaint. “Volvo tries to obscure the true nature of the Care by Volvo lease from consumers by marketing it as a subscription service.”
But whether it’s an outright purchase, a lease or a subscribed vehicle, consumers are advised to weigh all factors, including customer reviews and a solid inspection of the car’s condition before driving.
“Security is a top priority,” said Kasparian. “Customers should always look carefully at safety records and inquire if a pre-used vehicle has a good maintenance record.”
That’s good advice given the national class action lawsuit that was filed against automakers, such as Kia, Hyundai, Mitsubishi, Acura and Toyota, earlier this year over alleged defective airbag control units (ACU) within vehicles, which were safety device failures.
“The gift of car care will not only let your family and friends check an important task off their list but it will help keep them safe on the road,” said Rich White, executive director of the Car Care Council.
Filed in the Central District Court in Los Angeles in July, Ryan Baldwin v. Kia Motor America, Inc alleges automakers knew of the ZF-TRW defect but promoted the cars as safe and have refused to issue a recall because of economics.
“If a loved one appreciates their car, it’s a good idea to consider a gift certificate that is open-ended --- one that can be used on any product or service,” Kasparian said. “That way they can pick and choose the way in which they use the gift based on their exact needs.”
Juliette Fairley is an author, lecturer and TV host based in New York.
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