What Are Car Subscription Services?

If you want a car to call your own, there are usually two ways to get one: Buy or lease.

Now there's a third alternative: car subscription services. They're operating in a number of places in the U.S., with one nationally available service so far.

You don't actually own the car with a subscription service, just as you don't own the car if you're leasing. Instead, you get the use of a car for an all-inclusive monthly fee. The fee typically covers insurance, roadside assistance and maintenance. With some car subscription programs, a key feature is your ability to "flip" in and out of different cars with just a few days' notice, often with a concierge delivering the vehicle to you. For example, you could drive a sedan during the week and switch into a sports car or an SUV for a weekend trip.

Who Offers Car Subscription Services?

Carmakers are launching subscription services at a steady clip. BMW introduced its Access by BMW subscription service this April in the Nashville market. Mercedes-Benz is testing its multitiered Mercedes-Benz Collection subscription service in Nashville and Philadelphia. Audi launched its service, Audi Select, in the Dallas-Fort Worth metro area in late September.

Ford's used-car subscription service, known as Canvas, operates in San Francisco and Los Angeles. Lincoln also has started offering 2015 and 2017 vehicles in those areas via Canvas. Porsche's car subscription service, Porsche Passport, operates only in the Atlanta area.

The granddaddy of car subscription services, Book by Cadillac, had been operating in the Los Angeles, Dallas and greater New York markets, but "hit the pause button" December 1, as a company spokesman put it. Cadillac will relaunch the program in the first quarter of 2019, Cadillac spokesman Andrew Lipman told Automotive News. He declined to say how the program will change. Company sources cited cost and problems with back-end technology involved in fleet management as reasons for the decision to put Book by Cadillac on hiatus, according to The Wall Street Journal.

Meanwhile, Care by Volvo is Volvo's car subscription service and is available nationally. Both the 2019 Volvo XC40, a subcompact luxury SUV, and the redesigned 2019 S60 sedan can be had via a subscription. Volvo also plans to make the redesigned 2019 V60 wagon available through the subscription program.

Lexus says it will offer a subscription for its all-new 2019 UX subcompact crossover. Jeep plans to offer its Jeep Wave subscription service in 2019. Polestar, the startup electric car brand owned by Volvo Car Group, also plans to offer a subscription plan for its 2020 Polestar 1 and Polestar 2 vehicles.

Startup companies and dealership groups also are in the car subscription business and include the following: Fair is based in Los Angeles and offers cars in nearly 20 locations across the country. Flexdrive is partnering with dealers in cities including Austin, Atlanta and Philadelphia, offering vehicles from a variety of carmakers. Clutch Technologies has created a car subscription platform that powers several dealership-based services, including Clutch Atlanta; Drive Flow in the North Carolina cities of Winston-Salem and Raleigh; Wyler FastLane in the Cincinnati area; and Drive Germain in Columbus, Ohio. Detroit-based Mobiliti has launched in Austin, Texas; the Detroit area; Harrisburg, Pennsylvania, and Lawrenceville, New Jersey. PrimeFlip offers luxury sedans and SUV in the New England area. In South Florida, there is Revolve, which specializes in luxury cars.

Applying a subscription model to more niche markets are Less, based in the San Francisco Bay Area, and Borrow in Los Angeles. Members of Less sign up for a 36-month lease term but switch luxury cars annually. Borrow has only electric cars, available for three-, six- or nine-month terms. Home chargers and some charging credits are included.

Why Might I Be Interested in a Car Subscription Service?

• Convenience. Most let you set up the subscription online and manage it via a smartphone app. The company usually delivers the car to you.

• Flexibility. You can change cars more frequently than with leasing or buying.

• Potential cost savings. There are no down payments or financing charges.

• No negotiating. The fees are set.

• Less commitment. Some subscription services can be for as short as a month.

• Some shoppers with damaged or light credit may find it easier to be accepted into a subscription service than getting approved for a traditional finance contract or lease program.

Why Might I Not Be Interested?

• Ownership is important to you. You want to buy a car, pay it off, and be free of a monthly payment for a few years.

• Restrictions on car use. Most car subscription programs impose rules on drivers, and a number use vehicle tracking. More about that later.

• Switching cars holds no appeal.

• Again, no negotiating. If you're someone who waits for car sales or you're good at driving a hard bargain when leasing or buying, your skills will go unused with subscription plans.

What Do Car Subscription Services Cost?

Prices depend on the cars and the subscription service that's offering them. Here are some examples:

• Access by BMW debuts at $1,099 per month, with two more tiers at $1,399 and $2,699. The tiers include a variety of vehicles, such as the 330i, the X5, the 5 Series and, at the highest monthly price point, BMW's Motorsports performance vehicles, such as the M5. Participation in the most expensive tier gets you access to all the vehicles in the less pricey ones.

• Audi Select costs $1,395 per month and lets you choose from the Audi A4 sedan, the A5 cabriolet, the Q5 and Q7 SUVs and the S5 coupe. Subscribers also get a credit for up to two days of Audi's Silvercar rental service per month, at more than 20 airport locations around the country.

• When it was available, Book by Cadillac cost $1,800 per month and let you select from six models: the ATS-V, the CTS-V, the CT6, the XT5, Escalade or the CTS-V Wagon. Cadillac has not said whether the price will be the same when the program relaunches. 

• Care by Volvo starts at $650 per month for the 2019 XC40.

• Drive Flow starts at $850 per month.

• Mercedes-Benz Collection offers the $1,095 per month Signature plan, which includes smaller vehicles in the Mercedes lineup, such as the C 300 and the GLC 300. The $1,595 Reserve plan offers larger vehicles such as the E 400 Wagon. The Premier program has a price tag of $2,995 per month and includes such vehicles as the S 560 sedan and the G 550 SUV.

• Fair starts at around $160 a month. (You'd provide your own insurance at this price point.) The fleet includes used cars that are less than 6 years old from various makers.

• Flexdrive depends on the car and location, but recently, a 2016 Toyota Corolla was available in Philadelphia for about $800 a month with unlimited miles.

• Ford Canvas starts at around $380 a month. The vehicles are newer used Ford cars and SUVs. Trucks are coming soon, according to the site.

• Porsche Passport charges either $2,000 or $3,000 per month, depending on the pool of cars selected. These include a variety of Porsche luxury sport vehicles, such as the Boxster, the Cayman, the Macan, the Panamera and the 911.

• Car subscription programs also usually require some kind of start fee, ranging from about $200 to $600.

Are Car Subscription Services Cheaper Than Buying or Leasing?

It's difficult to compare subscription services to buying or leasing because the traditional ways of acquiring a car and these services are quite different. There's also a lot of variation among the subscription plans. Nevertheless, Edmunds has analyzed the costs in a couple ways.

First, we looked at some subscription programs versus lease or purchase scenarios to arrive at a monthly cost comparison.

• Car subscription vs. used-car buying: Let's say you use Ford's Canvas service to get a 2015 Ford Escape in the Titanium trim level with 15,000 annual miles, or 1,250 miles a month. If you signed up for a single month of service, that month would cost you $880. If you opted for a longer subscription, the price would drop. If you agreed to a six-month commitment, for example, your monthly payment would dip to $592. Commit to a full year, and the payment would go down to $555. Unlimited miles could be had for an additional $40 per month.

  To buy a comparable certified pre-owned Escape with a 60-month, zero-down loan, you would pay about $425 a month. Insurance would be about $240 per month, for a total of $665.

• Car subscription vs. leasing: Let's say you subscribed to Book by Cadillac (under the program that's now paused) and chose the Escalade. You would have paid $1,800 a month, plus a one-time $500 fee. You would have received 2,000 miles a month and could switch cars in the Book by Cadillac fleet up to 18 times a year.

  To lease a 2018 Cadillac Escalade with $500 as the startup cost, including taxes and the upcharge for the same mileage as Book by Cadillac, you'd pay $1,600 a month. Our insurance quote was about $375 a month, for a total monthly cost of $1,975. If you wanted a sports car comparable to a CTS-V for a special weekend, it would cost you $150 or more a day to rent one.

Second, Edmunds analysts took a macro view and compared average three-year lease costs for vehicles available in manufacturer-sponsored programs against the costs of the subscription programs. The difference between the two is the "subscription premium." This is the three-year cost you pay in order to get the features of the subscription program, including the ability to "flip" cars within a month and, in many cases, enjoy unlimited mileage. Flipping is offered by BMW,  Mercedes and Porsche. Within-the-month flipping is not available in Care by Volvo. Mileage is unlimited in the Mercedes and Porsche programs. Access by BMW  allows 2,000 miles a month (24,000 miles annually). Care by Volvo allows 15,000 miles annually.

Among the programs, only Volvo's subscription cost is less than the average lease. It's not surprising, though, in that its program is quite different from the other OEM offerings and is more like a traditional lease.

Note: The three-year lease costs are based on Edmunds transaction data. Costs include average insurance costs and 12,000 annual miles. Taxes are not included.

What Else Do I Need to Know About Car Subscription Services?

The services will typically check your credit and driving history before they let you join. They want to ensure you can pay for the car each month and that you're a safe, responsible driver. You'll typically need a credit card to sign up, and in most cases, you will have to agree that the company can periodically check your driving record while you're part of the service.

The cars aren't brand-new. Even if you were to get a current model-year car, you're not guaranteed that you'll be the first person to drive it. Most car subscription services offer cars that are less than 3 years old, however, and the more premium programs promise that they'll be in excellent condition. The exception to the brand-new-car caveat is Care by Volvo: The vehicle you select is yours alone for a 24-month subscription. You have the option to switch into another Volvo car at 12 months.

There are usually mileage limits. Some services let you select your mileage and build that cost into the monthly subscription fee. Others, such as Care by Volvo, have set annual or monthly mileage allocations. In all cases, you'd pay for each additional mile if you exceed the limits, just as you would if you leased a car. As noted earlier, some car subscription programs have no mileage limits.

There might be restrictions on how you use the car. Companies are managing large fleets of cars and promising short turnaround times for subscribers who want to change vehicles. To do that, they have to keep the cars in good condition. And to minimize loss, repairs and reconditioning, they will put limits on what you do with their vehicles. These vary, but here are some examples:

• Many programs, require that you transport your pets in carriers, unless they're service animals. If your dog does ride outside a cage or carrier, you'll pay a repair and cleaning cost.

• Most services don't permit any smoking in their cars. Some may charge an "excess wear and tear" fee if there's a persistent odor when you turn in the car.

• Additional drivers might have to be authorized by the company in advance (unless it's an emergency situation).

• Depending on the service, your use might be limited to the continental United States. No jaunts to Canada or Mexico.

• You will probably be tracked. The companies want to know where their cars are, not only in case they're stolen but also in case a subscriber's credit card maxes out or a subscriber violates the service agreement. Canvas notes that it places a tracking device in each car to record location information and driver behavior that might violate the subscription agreement. Other services may also use vehicle tracking. Check the user agreement or privacy policy for details. Understand that by signing up for a service, you're agreeing to let the companies access and use the stored vehicle information.

• Insurance coverage may differ from what you have now. Most services include insurance in the monthly fee. Fair is an exception: It allows you to use your own insurance or, if you qualify, you can buy coverage from Fair and include it in your monthly fee. The limits and deductibles vary, and they might not be what you have now. If you decide to sign up for a car subscription service, you might want to review the coverage with your insurance agent to see if what's offered is right for you.