Subscriptions can be plus for dealers, panelists say

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DETROIT – As more dealers try their vehicle subscription, Mobiliti CEO Chance Richie encourages them to consider a subscription as an independent profit center instead of a lead generator for other revenue streams.

"We are proud that our dealer partners ensure that they earn money every month with the subscription," Richie said during a panel discussion here.

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The Automotive Press Association organized the panel Tuesday to explore the business and consumer benefits of subscription services and the growing demand for an alternative to traditional car ownership.

Mobiliti, an app-based subscription service with headquarters in Detroit, brings dealers together in the subscription service network and offers fleetservice financing through its partnership with Ally Financial.

The company has 25 employees, about 100 dealer partners and 1,000 users. The monthly subscription costs of Mobiliti range from $ 550 to $ 1200 and cover insurance, maintenance and breakdown assistance.

Building price models for subscriptions around depreciation characteristics, the largest driver of subscription costs, will produce positive sales experiences for dealers when vehicles are ready for service, according to Richie.

"In general, it will be powered by vehicles with the lowest depreciation," Richie said. "They are Jeep Wranglers, it is Toyota, they are small SUVs – these are generally the things that work really well."

The broad spectrum of brand options is the stark advantage that dealers hold on to subscriptions to automatic brand subscriptions, such as Lincoln's Canvas or Audi Select, but dealers must have the employees and resources to support the business model, told panel boss Ryan LaFontaine at Automotive News .

  Lexus willing to wait on subscriptions

With 17 dealerships across Michigan, LaFontaine Automotive Group in Highland, Michigan, has the advantage of being more accessible to potential customers, said LaFontaine, the dealer principal.

"Do I think it will take over the industry? I do not," he said. "Do I think it will be a part of it, a chance for the consumer? 100 percent, and I want to be ready for that."

During the panel discussion, LaFontaine said that his dealer group did not cooperate with Mobiliti, but is at a stage where it is "ready to go" with the company's platform.

He told Automotive News: "Before I just jump in, especially us [an] 80 per cent lease market, I try to get other markets a bit out of the test pilot and get more data to show which vehicles are really successful, not only from the point of view of consumer demand, but also from the point of view of the economy.

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