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James Baggott News

James Baggott: Who will want to buy a car when subscribing opens so many doors?

Time 11:15 am, June 26, 2018

IF you’ve never heard of Generation Rent, well, you’ve probably had your head stuck in an over-polluting Volkswagen engine, because their time is now.

In fact, you’re probably even one of them. Yes, you might own your own house, but I bet that’s about it – the rest is probably borrowed, rented or streamed, and that’s not going to change any time soon.

Remember when you used to buy records, tapes or CDs? Those days have gone. Now, no one even cares if their new car has a CD player, as all their music is streamed via a phone.

Even owning music digitally on a phone or computer has become obsolete. Gone are the days you’d download a track for 59p from the iTunes Store, replaced instead by a bottomless pit of music on demand from Spotify, Apple Music or that other one owned by a rapper that no one uses.

I found my old iPod the other day and my seven-year-old daughter asked what it was. ‘It’s what people had before iPhones,’ I told her.

‘How does it take pictures?’ she asked, before I gave up on the futile history lesson. Who would have thought a gadget as revolutionary as the iPod would ever seem so obsolete?

We don’t even rent movies any more. Remember Netflix started as LoveFilm – a DVD and video borrowing service that sent you movies through the post.

And before that, you’d pop down to 
the local Blockbuster to pick your choice of movie for the night and hope that they had enough discs in stock.

Just think about that now. Can you imagine not being able to watch the film you wanted to because 30 other people had got in before you? Sounds ridiculous, doesn’t it? But it wasn’t even that long ago – just four short years, in fact.

Change happens quickly. And don’t think it’s not coming to a dealership near you soon. At CDX this year we spoke long and hard about the changes afoot in dealerships up and down the country. From digital dealerships and online car sales to the next big thing in the finance world.

But there was one thing that we only touched on, something that could appeal to Generation Rent like no other: Subscription car ownership.

Brands have tried it before in the UK. Peugeot and Volvo dabbled, but the market wasn’t quite ready – but now I think it is, with buyers used to renting now ripe for an offer that suits their needs. Picture this: The customer doesn’t know what car to buy. They want something sporty but practical, they want boot space for family holidays but also top-down motoring for sunny drives home from work.

No questions asked

They want two-seat fun but sometimes need seven-seat practicality. Well, they’re not going to get that on a standard 
PCP deal, are they?

But what if for £500 a month they had access to all that? Every car in your brand’s range made available to them as and when they wanted it with 24 hours’ notice, delivered to their door with no questions asked. Do you think that would appeal to some people? Of course it would!

It’s already taking hold in the States. Mercedes is the latest brand to enter the market with its Collection programme.

For around £800 a month, subscribers get access to pretty much the entire Mercedes range, including the brand’s AMG models. They can book the cars via a smartphone app and they’re delivered by a concierge service to their home with no mileage restrictions to worry about.

Mercedes isn’t the only one doing it in
 the States – BMW, Porsche and Cadillac 
all offer similar schemes and they’re growing in popularity.

The services also offer manufacturers an answer to an increasing conundrum too – with cars getting more reliable, the 
replacement cycle gets longer, and when buyers don’t want to change cars frequently, car manufacturers can struggle. A regular stream of cars to swap into helps all that.

It might not have struck a chord with UK car buyers just yet but it’s only a matter of time before it does. And where does that leave car dealers? Will they simply become elaborate car hire firms, stocking huge numbers of cars for manufacturers, or will there still be a large number of people who still want to own their cars?

If you look at the music or movie markets, the signs certainly don’t point towards an ownership model. How dealers fit into this inevitable transition from buy-it to rent-it car ownership remains to be seen, but ignoring the change could be suicide. Just look at what happened to Blockbuster – it came out of the blue, thick and fast. Let’s hope the same doesn’t ring true for the car industry.

James Baggott is the founder of Car Dealer Magazine and chief executive officer of parent company @BaizeGroup, an automotive services provider. He now spends most of his time on Twitter @CarDealerEd and annoying the rest of us.

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James Baggott's avatar

James is the founder and editor-in-chief of Car Dealer Magazine, and CEO of parent company Baize Group. James has been a motoring journalist for more than 20 years writing about cars and the car industry.

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