A growing number of European consumers are considering car subscription services as an alternative to traditional vehicle ownership, according to a 2024 study by Deloitte.
The study found that 31 per cent of consumers are open to the idea of car subscriptions, with 38 per cent valuing the flexibility these services offer. Consumers are increasingly seeking shorter-term commitments and want to avoid the long-term responsibilities of vehicle maintenance and depreciation. Many are also drawn to the simplicity of a fixed monthly fee covering all costs.
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David Bailey, a business economics professor at Birmingham Business School and an expert on the automotive industry, noted the rising popularity of car subscription services, particularly among younger drivers.
“Car subscription services have taken off in Europe, especially with younger drivers. They give drivers more flexibility and choice. The cost of full ownership can be prohibitive for younger buyers in big European cities especially once insurance is factored in. Here car subscription offers the use of your ‘own’ car without all the hassle of full ownership. It is part of the ‘mobility as a service’ movement which is taking off,” he said.
Industry embraces subscriptions
Jesper Hill-Kjærsgaard, CEO of the Danish car subscription service :Dribe, said that major automotive players are increasingly taking an interest in subscription models.
“We’re seeing an increasing number of dealerships exploring new revenue streams to accommodate the change in technology and consumer behaviour. Many see subscription models as a catalyst for both growth and retention, he said.
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By GlobalDataHe added: “The industry is recognising the opportunities presented by a plug-and-play solution that enables implementation of a subscription service without significant investments. Automated processes and streamlined digital management reduce the need for manual labour.”
David Bailey said he is not surprised car subscription services are attracting interest in franchise-type setups. “There is a gap in the market for fleet managers to use this type of service. Across Europe, the market is set up to grow substantially in the future, he said.
Subscriptions boost EV adoption
A key factor driving the interest in car subscriptions among dealerships is the opportunity they present for electric vehicle (EV) adoption. According to Bailey, subscriptions offer a low-risk way for consumers to try EVs without committing to the full cost of ownership.
He said subscription services allow consumers to ‘dip their toes’ into the world of EVs. This approach will be crucial in encouraging wider EV adoption, Bailey noted.
Hill-Kjærsgaard of :Dribe – which is owned by the Denmark-based Semler Group – echoed this sentiment, highlighting the financial barriers that often deter consumers from purchasing electric vehicles outright. “Coupled with the uncertainty around future resale values, subscription models provide a flexible way to embrace the future of mobility without making a heavy financial commitment – meeting the evolving needs of today’s consumers,” he said.
