On Tuesday, vehicle subscription service provider Mobiliti announced its partnership with New York dealership Island Auto Group to provide a “flexible transportation option” for New Yorkers.
The service launches in June to help users navigate summer sale and will offer month-to-month vehicle payments, with the price including insurance, maintenance, warranty coverage, and roadside assistance.
Currently, the dealership is financing the fleet of vehicles, but Ally Financial is working with Mobiliti to provide a fleet financing line for the subscription service.
Vehicle subscription services are an alternative for consumers who want to opt-out of commitments that come from owning a vehicle, Mobiliti CEO and co-founder Chance Richie told Auto Finance News.
“A vehicle subscription service is for people who want a car but aren’t ready for ownership,” he said. “It’s similar to a lease, but without the things consumers dislike most about leasing including long-term contracts and upfront costs.”
Specific costs will vary depending on make and model, but Richie said prices would range from $549 to $1,400. Customers using the app will be able to use a slider (ranging from $0 to $3,000) to set their desired price range, and there will also be mileage tiers to meet customers’ specific needs.
With new car sales declining and used car inventory on the rise, Mobiliti points out that dealers could use subscription services to generate new business by offering customers a third option.
“Mobiliti is helping to create another revenue stream and drive new customers to the showroom and service bays,” said Josh Aaronson, co-owner of Island Auto Group.
Plus, Richie told AFN, dealers maintain total autonomy over what happens to vehicles in a subscription service. It’s up to the dealer to decide vehicle availability based on miles drive or months in the program, as well as how long the vehicle remains in the fleet.
Once the vehicle is turned in, Richie said, the dealer has three options:
- The vehicle can remain in the fleet for more subscriptions and listed for sale concurrently
- It can be removed from the fleet entirely and moved back to inventory for retail sale
- It can be placed in wholesale auction channels.