How would you feel about paying $5 each month for the ability to lock and unlock your car from a distance through an app? What about a $25-per-month charge for advanced cruise control or $10 to access heated seats? What if those charges continued long after your car was paid off?
Not content with the relatively low-margin business of building and selling cars, automakers are eager to pull down Silicon Valley-style profits. But unlike with Netflix, you won’t be able to use your ex-girlfriend’s uncle’s login in your new BMW.
For automakers, the advantage of this model is clear. Not only do they get a stream of recurring revenue for years after an initial purchase, they can hope to maintain a longer-term relationship with the customer and build brand loyalty, said Kristin Kolodge, vice president and head of auto benchmarking and mobility development at J.D. Power.
Brands including Lexus, Toyota, and Subaru invite owners to pay for the convenience of being able to lock or start their cars remotely through an app. In some BMWs, you can pay to unlock automatic high-beam headlights, which dim for oncoming traffic. In 2020, BMW floated the idea of pay-as-you-go heated seats and steering wheels. General Motors and Ford both offer subscription plans for their hands-free highway driving systems.
Automakers run the risk of making customers feel like they’re paying twice — once for a function to be built into a vehicle and again to activate it, Kolodge said. They may have more luck asking people to subscribe to brand-new services, rather than familiar features, she added.
Still, automakers see dollar signs. Stellantis (formerly Fiat Chrysler), Ford, and GM each aim to generate at least $20 billion in annual revenue from software services by 2030.
Over-the-air capabilities open up huge opportunities for carmakers to introduce new subscription or pay-per use features over time, Wakefield, of AlixPartners, said. Someday, you may be able to fork over extra to make your car more efficient, sportier, or — in an electric vehicle — unlock extra range for road trips.
Very simply, fuck you, no.
A new truck is well over $50,000 for anything other than a bare bones work truck.
Payments on a new truck are easily over $800 per month (ask me how I know).
So on top of the payment for the truck, I’m now going to have to pay for all the options I wanted as a monthly fee?
And let me guess, they will be seasonally priced.
So I want to run the Max A/C setting in the South in summer it’s going to be $25 per month.
And there is literally no end to what this can do.
Did you want the high horsepower sports package? That’s $50 per month or we leave the limiter on.
The new car market will die.
People will hang onto used cars and keep fixing them until they disintegrate into rust.
People will not stand to pay monthly subscription charges for options they used to pay for once.
Or there will be an entire sub-industry of jail breaking cars to unlock all the options without a fee.
Ultimately it means I’m done buying new cars and I know I’m not alone.