Car subscriptions are becoming increasingly popular as drivers start to question if they really need to own a vehicle and be lumbered with all their running costs.
One firm that has attracted a great deal of interest is Drover.
Launched in 2016 by Felix Leuschner and Matthew Varughese, the London-based self-styled ‘Netflix for cars’ won £5.5m of backing in 2018, having secured £2m of ‘pre-seed’ funding, and boasts a £20m turnover.
Here, we take a look at the business model that is moving in on the automotive retail industry.
What exactly is a car subscription?
Car subscriptions let people drive a car for a monthly fee.
You also have to pay a joining fee, so how is it better than a lease?
There’s no long-term commitment – for example, Drover lets people have a car for between one month and two years. It also offers a rolling one-month term.
Is that it?
No – you can also swap your car or cancel the agreement at any time.
How does it work then?
It’s all pretty simple, really. With Drover, you choose your car on the website then put in a booking request specifying your mileage, the contract duration you want, plus your preferred method of delivery and insurance if you want it.
Drover then verifies everything, including making a soft credit search – all of which doesn’t affect your credit score – and if everything is OK your car is delivered a few days later.
What’s included in the fee?
Your first payment with Drover includes the joining fee of £249. After that, the flat monthly fee covers you for vehicle tax, servicing, breakdown cover and insurance if you opted for it. All you have to pay for is the fuel.
And if you leave Drover and go back to it in the future, you won’t have to pay the joining fee again.
Customers are liable for any charges, fines or penalties that you incur, though – eg, the congestion charge and ULEZ charge, plus penalty charge notices and fines for traffic offences – as well as for damage caused to the vehicle.
Are there any other benefits?
Using a subscription service can see you behind the wheel of a car that you couldn’t normally afford. Drover also lets you share your car via the Turo platform when you’re not using it, which can help off-set the cost of a subscription
Is it more expensive than leasing?
Drover says that on average its prices work out less than a two-year lease.
Is it going to disrupt car dealers?
Pictured above are Drover co-founders Matthew Varughese, left, and Felix Leuschner