Car subscription is rapidly becoming a popular and cost-effective alternative to vehicle ownership and leasing – and now pioneering firm Wagonex is making it even easier for dealers to make money from its digital and paperless model.
Not only is it waiving its set-up fees and offering three months’ free use of the subscription platform, saving dealers hundreds of pounds, those three months will only start once a dealer signs their first customer.
The company, which is backed by an institutional investor as well as private individuals, began life in August 2016 in Shoreditch, but it has grown since and now has its head office in Cardiff plus a hub in London and is looking to expand and recruit further, currently eyeing up overseas offices.
Wagonex works with dealerships, letting people drive an SUV during the winter and a convertible in the summer. Wagonex works with dealerships so they can digitally show their stock, and it gives potential customers – personal and business – the opportunity to find a subscription level that suits them best, starting at a one-month rolling contract all the way up to 24 months.
To quote their CEO, the key benefits of car subscription for subscribers include:
● Flexibility – No need for customers to be locked into a long-term lease
● All-inclusive – Customers just need to put in the fuel, as everything else is covered: roadside assistance, vehicle tax, service, maintenance and . . .
● Insurance – Wagonex takes care of all that, arranging personalised quotes for
customers who don’t want to use their existing provider (more on that further down)
There are no MOTs to worry about either, as all of the cars are new or nearly new.
With the digital route becoming increasingly important for car dealers to attract customers, especially as a result of the pandemic, we caught up with Wagonex founder and CEO Toby Kernon to find out more about the company and its exciting proposition.
He explained how Wagonex, as a software business, had developed and built numerous platforms for companies of all shapes and sizes in the automotive sector.
As this year began, Wagonex billed 2020 as ‘the year of car subscription’. It had seen at industry events how engaged people were becoming with the subscription model, and it had worked hard on developing the perfect model that enabled dealers to test it with any vehicle.
‘It was very encouraging to see the industry now also discussing subscription, and the list of partners we’ve got coming up in the next couple of months is testament to that,’ he said.
The pandemic has brought about widespread changes in the automotive sector, and Wagonex has been quick to adapt its model to ensure that dealers get the maximum benefit, especially when cash flow could be a problem and spending money on new and innovative ideas may not be high on their agenda.
‘It made us think that we can build mini-subscription platforms upon our main platform and allow anyone to use it, so we’ve launched that very quickly and it’s something the industry can use extremely quickly,’ said Kernon.
‘We’re waiving all set-up and licence fees for three months and that three-month period is triggered only when the first vehicle goes out on the road.
‘It’s a way for us to demonstrate that the platform is a very slick bit of kit. We know this works – we’ve had a significant increase in consumer inquiries and interest, particularly now coming out of Covid – and we want to let dealers test it at no cost to them.
‘In a time where the industry has struggled – awfully, by comparison to others – it’s a free “try-before-you-buy” way for dealers to get used to the subscription model and to understand that our platform is a real asset and that it’s a viable business model.’
And with the spending factor more important than ever these days, Toby highlighted just how beneficial the instant-pricing insurance element of its car subscription model was. After all, insurance can be an extremely expensive burden, so not having to worry about it is a real boon in this current cost-saving climate.
‘One of the main things of the product is that our insurance is bespoke to each customer. We spent a long time building a fully automated insurance pricing engine so any customer that comes on to any of the platforms has their own tailor-made insurance pricing that includes their driving history and their no-claims discount.
‘What that does is it takes that asset risk off a dealer’s balance sheet, so you only have to be concerned about insuring vehicles that are on site. It’s become a very strong proposition for us.’
Toby also emphasised that the subscription model allowed dealers to monetise vehicles that wouldn’t otherwise be monetised, such as demonstration stock, pre-registered stock and new stock that may be sitting around not doing anything.
He added: ‘There’s a massive change in consumer behaviour away from owning anything and it’s clearly coming into the car space, even more so now, particularly after this crisis.
‘Our platform allows digitalisation of the customer journey. It’s flexible for the consumer and the car dealer makes money. We’ve honed the proposition to a point where we think that everybody benefits. We have a model that works for everybody and it can scale very quickly.’