With many in the workforce being stood down or their future job security being called into doubt, car buyers are increasingly looking to the subscription model as an alternative to outright purchase because they can hand subscription cars back with just one month’s notice if their circumstances become more difficult.
And the increased interest in subscriptions is generating a demand for cars to be placed with subscribers.
Chris Noone, the CEO of Collaborate Corporation which owns leading car subscription service Carly, has told GoAutoNews Premium: “We are seeing a good stream of business coming through, we have more vehicles coming in and more customers taking up subscriptions.
“We think there will be a bit of rockiness over the next few weeks as people digest all the various information around them but we think we are actually fairly well positioned for this because people will be seeking lower-risk alternatives to accessing a car which we very much represent.
“We see that as an opportunity. We feel that there are probably a number of cars out there in fleets that are going to be sitting idle, especially in holiday and business travel rentals which have seen a massive reduction in their businesses.
“Our model is to monetise vehicles that are just sitting there and not being monetised,” Mr Noone said.
“So we think that from a supply point of view there will be a lot more vehicles available for our marketplace. We think there may be a lot of ex-rental vehicles and we think a lot of these vehicles might be coming back to OEMs and dealers as buy-backs as well.
Chris Noone
“So we are very interested in securing supply of those vehicles because we are addressing a different market with different demand characteristics.”
Mr Noone said that Carly was still a strong contender to place dealers’ cars on subscriptions during the current crisis.
“We think there are a number of people who up until now may have been considering a purchase of a car or a lease and now they are probably thinking that they need to put that on hold,” he said.
“But they still need a car.
“Their options are to walk or get a rental car which can typically be expensive. So we believe in our model and we still believe that it is applicable in this environment; in fact, even more so in this environment.”
Mr Noone said that Carly was “still very interested in the supply of vehicles and we are looking to monetise them in multiple locations”.
He said that with the current situation many people coming off lease may hesitate to recommit to buying or leasing again over three or more years and prefer the flexibility of potentially committing to a subscription deal with just one month’s termination notice.
“They feel more secure not making that longer-term commitment,” Mr Noone said.
“We are happy to take people through that part of their vehicle journey. Where we are appropriate for them we provide them with a vehicle and when their circumstances change again in six months’ time, for example, when they are in a position to make a longer-term purchase, we are totally open to people making that change as well.”
Footnote: The number of cars coming off lease is not definitively known but industry estimates suggest there are potentially 500,000 on lease at any one time based on lease company reporting and that a third of those would be coming back into the market each year.
By John Mellor
