Access by BMW car subscription service launched in the US – two tiers, unlimited swaps, from $2k monthly

To drive a car, you must buy one. That’s the convention that we’re used to, but there’s a new trend in the West – car subscription. Just like how you subscribe to Spotify and listen to whatever you want for a fixed fee, you can drive whichever model you want, and swap it for another model when you need or want to. No need to worry about maintenance, insurance or road tax. Sounds good?

BMW is the latest to offer a vehicle subscription service in the US. Access by BMW, the name of the service, will provide members with unlimited access to a diverse fleet of BMW vehicles through a single monthly subscription. The service debuts as a pilot programme in Nashville, Tennessee and will be facilitated by local BMW dealers who are responsible for vehicle deliveries and maintenance.

Here’s how it works. After paying the US$575 (RM2,225) joining fee, members can request a vehicle via a mobile app, after which a BMW concierge will personally deliver a fully-fueled car “most closely matching the member’s needs” to their location at the desired time. The monthly ration is 2,000 miles (3,218 km) and unused miles can be rolled over. Go past 2k and there will be a US$0.50 (RM1.90) per mile surcharge. There is no limit to how often members can switch vehicles within a given month.

But there are tiers, and you can only choose from cars within your tier. The US$2,000 (RM7,740) ‘Legend’ tier is quite diverse. It includes sedans (5 Series), SUVs (X5), coupes and convertibles (4 Series), iPerformance plug-in hybrids (530e, X5 xDrive40e) and one M option for the times when you need to let off steam – the M2 is great for that.

If that’s not “emotional” enough, there’s the “M” tier, which is self-explanatory. The M4, M5, M6, X5M and X6M are all yours to choose from for US$3,700 (RM14,319) a month. The monthly fees are inclusive of vehicle maintenance, insurance and BMW Roadside Assistance – basically, there are no additional motoring-related costs a typical car owner must bear, except for fuel. BMW is looking at more (lower) tiers as the programme expands.

BMW isn’t the first or the only one onto this new business model. Late last year, Porsche started its app-based subscription service called Porsche Passport. The pilot project is limited to 50 people in the city of Atlanta in the US.

Like BMW’s plan, Porsche offers two tiers – US$2,000 (RM7,740) a month opens one up to the 718 Boxster, Cayman S, Macan S or Cayenne on demand. A buffet of 22 Porsche models is available for US$1,000 more (RM11,611) per month. No limit to how many times one can swap cars, and all incidentals are covered, except for fuel. Care by Volvo and Cadillac’s BOOK work on the same subscription premise.

It’s clear why the carmakers are experimenting with subscription. Younger consumers are used to “using without owning” – think Uber (vs owning a car) and Spotify (vs buying a record) – and carmakers need to adapt to this commitment-free trend that might very well be the norm in the future.

“As customers continue to explore the growing mobility market, service-related offerings are becoming more in demand. Subscription-based services are of emerging interest for our customers, and we’re excited to be offering a mobility service to meet their individual and evolving needs,” said Ian Smith, CEO of BMW Group Financial Services USA.

“A pilot program is a great opportunity for us to learn. In the future, the nationwide network of BMW dealers will be integral to the success of Access by BMW. We will depend heavily on their close collaboration to continue to meet and exceed consumer expectations, and to ensure the sustainable development of this new business model,” he added.

Porsche is more direct. “We now have millennials who are incredibly successful and have the financial power to own a Porsche, but might not be willing to own a Porsche today. We are pretty sure it will help sales, especially in the mid and long term,” Klaus Zellmer, president of Porsche North America told Bloomberg.

Sounds brilliant doesn’t it? Changing cars whenever you like, without having to bother with potentially costly maintenance and insurance. And the amazing variety – how does a 530e for daily commuting, an M2 for a country road blast with the mates and an X3 M40i for the family trip sound? It will cost you though – the monthly subscription fees are significantly higher than a conventional hire purchase loan’s monthly repayment.

As pointed out by Bloomberg, the US$3,700 (RM14,319) monthly fee BMW asks for the M tier is nearly three times the cost of the monthly lease payments on a 2018 M5. Yes, three times, although the lease would require a US$5,724 (RM22,154) downpayment and the owner will need to spend on vehicle maintenance and insurance.

Still, the entry cost is high and that will be the prohibitive factor for many who will be keen on subscription – millennials who are incredibly successful (as Porsche calls its target market) won’t be outnumbering those who are just getting by anytime soon. It’s safe to say that unless the mass market players suddenly jump on the subscription wagon with real-world prices for real-world cars, we won’t be sampling rides on-demand like how we listen to music anytime soon.

Look at the brands tentatively dipping their toes in the water – they’re all premium players with fat profit margins to spare for small-scale experiments. At this stage, it’s probably not very profitable for both carmaker and customer, but car subscription is an interesting trend to watch. We could all be (car) players someday, who knows?

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