Called CarlyNow, the new service to dealers by-passes a raft of paperwork. It allows a buyer to drive out in the car of their choice with the flexibility of being a subscriber rather than locked into a longer-term financed contract.

The new service was announced at the recent AADA Convention in Sydney.

Carly CEO Chris Noone told GoAutoNews Premium said: “Normally when we work with dealers they allocate a dedicated subscription fleet to Carly. We put them on our website, we find subscribers for them, we collect the payments and we do all of the marketing. 

“What we’ve created with CarlyNow is the opportunity for a dealer to create a subscription on any vehicle that they own,” Mr Noone said. 

Chris Noone CEO & Ben Hershman COO Carly, at the AADA Convention showcasing CarlyNOW

“Under this new product they don’t have to dedicate a fleet to subscription. Now we can just create the subscription for any car on the fly. So the dealer doesn’t have to allocate and set aside vehicles purely for subscription. They just work on an ad hoc basis.”

“Imagine a customer walks in who is not sure and not really ready to buy. The salesperson can now say that if they are actually interested in that car, why don’t they take it on subscription for a couple of months. 

“Then, by logging into our system, the sales staff can create a subscription agreement for that person for that vehicle. By leveraging our platform, we apply the insurance, we collect the payment, and the customer can be driving away in a subscription vehicle. 

“Dealers don’t have to upload the car to our website in advance, they don’t need to tell us about it in advance, it all happens on the fly. 

“So it’s an opportunistic way for dealers to create a subscription for a vehicle that 10 minutes before they might not have even thought that there would be a subscription customer for that vehicle.

“Up to now the dealers would give us the details of their fleet of cars for subscription and display them on our website. The majority of the subscribers of those cars we found through our own marketing efforts. 

“Another example is a customer might come in and order a blue car to be delivered in six months. The salesperson can say they have a red one in stock; why not subscribe to that for the six months until the blue one arrives. And when the blue one arrives, we’ll swap you over.

“We have the blue one sitting there, we can create that subscription for you right now. So it’s about taking advantage of those immediate opportunities and not letting the customer walk out without having some form of the transaction with the dealer.

“The other opportunity for this is electric vehicles. Subscription is a great try-before-you-buy opportunity for electric vehicles. The customer can try it for three months and see if it’s right for them. The dealer can subscribe it to them and they come back at the end of the three months and buy that EV or buy another EV. But it gives customers that low-risk opportunity to try the electric vehicle.” Mr Noone said that the system gives the dealer the tools based on algorithms and formulas in the background that look at the market value of a vehicle and it presents a recommended subscription price for the customer. The dealer has a bit of leeway to increase or decrease the price and can also see the amount of money that the dealer would earn as well. 

Asked about stocking levels for Carly, which has been building up its own fleet of subscriber cars, Mr Noone said: “We’re still buying cars and we’re adding to the fleet every month. We’re actually getting about another 30 cars delivered in the next couple of weeks. 

“We were not looking for 1000 white hatchbacks that are all the same. We want to make sure there’s good variety in our fleet as well. So we are pretty effective at finding groups of five,10,15 or 20 cars from certain dealers that we can jump on quickly. And we’ve also got discretion as to what state we spend the money in, and what brands we’re going after, as well. 

“We also have the vehicles that are coming in from Hyundai and other dealer groups as well. They retain the ownership of those vehicles.

Mr Noone said that a little more than 50 per cent of the cars on the system belong to Carly.

“We will move between 60/40 and 40/60 depending on availability. If there’s really tight supply, we will need to put cash on the table and buy the cars. If there’s an excess of cars, and we’re moving closer towards that, that’s where our asset light model will be favoured and we’ll be taking more cars from OEMs, dealers and ex-lease vehicles.

Referring to interest rates, Mr Noone said: “We think it’s actually making this subscription model look more attractive because people are thinking that taking out a three or four-year loan on a vehicle with high interest rates might be a bit risky. They might think that the lower risk option is to take the subscription to have the flexibility to change the car or downgrade or upgrade when conditions change, 

Comparing subscription versus a lease, Mr Noone said that Carly analysis shows that the tipping point is around about 18 months. 

“So if you subscribe to a car for 18 months, that’s similar to taking out a loan or leasing a vehicle and then having to change that vehicle at the 18 month period. But if you took a lease for a vehicle and had to terminate it at 12 months, there’s some pretty hefty fees that you need to pay. In that situation, it’d be much cheaper for you to subscribe to a vehicle, and then just simply hand it back when you no longer need it. 

“The average subscription period for our vehicles is around five and a half months. So, it’s not people who just want a car for a holiday or to do something for a few days. It’s people who would normally buy or finance the car, but they know that their car needs will change at some point in the next year or two or three. And they can’t really make that commitment now because they know that they’ll probably need to change the car at some point.”

By John Mellor