Car Subscription Market By Type (Luxury, Economy, Mid-Size), Duration (Short-Term, Long-Term), End-User (Individual, Corporate), & Region for 2024-2031

Car Subscription Market Valuation – 2024-2031

The car subscription market is anticipated to witness significant growth in the coming years, driven by the increasing adoption of alternative mobility solutions and consumer preference for more flexible and hassle-free vehicle access. The market was valued at around USD 7543.61 Million in 2024 and is expected to reach USD 32706.71 Million by 2031, growing at a CAGR of around 22.20% from 2024 to 2031.

The growing consumer inclination towards on-demand and subscription-based services, coupled with the rising awareness of the environmental and cost benefits of car subscriptions, is fueling the market expansion. Additionally, integrating advanced technologies, such as connected car features and digital platforms, enhances the overall car subscription experience, further driving market growth.

To Get Detailed Analysis: Download Report PDF

Car Subscription Market: Definition/ Overview

Car subscription is an alternative to traditional car ownership or leasing, where individuals or businesses can access a vehicle for a fixed monthly fee. This model provides users with the flexibility to choose from a variety of vehicle options, swap cars as per their needs, and avoid the long-term commitment and high upfront costs associated with traditional car ownership. In a car subscription service, the subscriber pays a monthly fee that covers the vehicle’s insurance, maintenance, and roadside assistance, allowing for a hassle-free driving experience. The subscription can be short-term, typically ranging from a few months to a year, or long-term, extending up to several years. This model caters to the evolving consumer preferences for mobility solutions that offer convenience, flexibility, and cost-effectiveness.

What's inside a VMR
industry report?

Our reports include actionable data and forward-looking analysis that help you craft pitches, create business plans, build presentations and write proposals.

>>> Ask For Discount @ – https://www.verifiedmarketresearch.com/ask-for-discount/?rid=240275

How does the Rising Popularity of Flexible and Hassle-free Mobility Solutions Drive the Car Subscription Market?

The sharing economy and shifting attitudes regarding car ownership are fueling growth in the car subscription market. According to a 2021 Cox Automotive report, 41% of consumers are willing to subscribe to a vehicle service rather than buy or lease. This transition is especially apparent among younger generations, with 57% of Gen Z respondents showing interest in car subscription services.

Growing urbanization and deteriorating traffic conditions in major cities are causing customers to seek more flexible mobility choices. According to the United Nations, 68% of the global population is expected to reside in cities by 2050, up from 55% in 2018. According to the Texas A&M Transportation Institute, the average American motorist spent 54 hours stuck in traffic in 2019, costing an estimated $1,080 per driver in wasted time and fuel.

Furthermore, the rising cost of new vehicles, combined with economic instability, has made car subscriptions an appealing alternative to traditional ownership. According to Kelley Blue Book, the average transaction price for a new vehicle in the United States was $47,077 in December 2021, representing a 14% increase year over year. Also, a Morning Consult survey from 2022 indicated that 73% of Americans feel the country is headed for a recession, which influences their desire to commit to long-term car ownership or leasing.

How do Regulatory Challenges and High Initial Costs Hinder the Growth of the Car Subscription Market?

Despite the growing popularity of car subscription services, the market faces certain challenges that impede its growth trajectory. One of the primary challenges is the regulatory landscape, which varies across different regions and creates barriers to the widespread adoption of car subscription models. Regulations governing vehicle registration, insurance, and taxation often need to be adapted to accommodate the car subscription model, which differs from traditional car ownership or leasing. The lack of harmonized regulatory frameworks across various countries and jurisdictions creates compliance issues for car subscription providers, limiting their ability to expand their services globally. Additionally, the high initial costs associated with establishing and maintaining a car subscription marker are a significant barrier, particularly for new market entrants. The upfront investments required for acquiring a diverse fleet of vehicles, developing the necessary digital infrastructure, and ensuring regulatory compliance are substantial, making it challenging for smaller players to enter the market and compete with established players.

Furthermore, consumer education and awareness about the benefits of car subscription services is also a hurdle. Some consumers are still hesitant to adopt the subscription model, preferring the traditional car ownership or leasing approach, which they are more familiar with. Overcoming this psychological barrier and convincing consumers to embrace the flexibility and convenience offered by car subscription services can be gradual. Another challenge lies in the accurate forecasting and management of vehicle supply and demand within the car subscription ecosystem. Ensuring a balanced fleet composition, efficient vehicle utilization, and timely replacements can be complex, especially as consumer preferences and market trends evolve. While these challenges may temporarily hinder the growth of the car subscription market, the market is expected to continue its upward trajectory as stakeholders work to address regulatory hurdles, optimize business models, and enhance consumer awareness and adoption.

Category-Wise Acumens

What are the Factors Driving the Luxury Subscription in the Market?

In the car subscription market, the luxury segment is expected to hold the largest market share during the forecast period. The growing demand for premium and high-end vehicles, coupled with the desire for a more exclusive and personalized driving experience, is driving the adoption of luxury car subscriptions. Luxury car subscribers often seek the convenience, flexibility, and status associated with accessing premium vehicles without the long-term commitment and high upfront costs of traditional ownership. Car subscription services allow these consumers to experience a diverse range of luxury cars, from high-performance sports cars to spacious SUVs, catering to their evolving preferences and lifestyle needs. Moreover, the integration of advanced features and technologies, such as connected car capabilities, enhanced safety systems, and premium in-car entertainment, further enhances the appeal of luxury car subscriptions. Subscribers are willing to pay a premium for the seamless and personalized mobility experience offered by these services.

The growing popularity of car subscription services among urban and affluent consumers, who value convenience and exclusivity, is a significant factor driving the dominance of the luxury segment. Additionally, the rising awareness of the environmental and cost benefits of car subscriptions, even in the luxury category, is contributing to the segment’s growth. The economy and mid-size car subscription segments are also expected to witness significant growth in the market. The economy segment caters to cost-conscious consumers who prioritize affordability and practicality, while the mid-size segment appeals to a broader range of customers seeking a balance between size, comfort, and value. Both these segments align with the increasing consumer demand for accessible and versatile transportation options within the car subscription ecosystem.

How Do the Short-term Car Subscriptions Reshape the Market Landscape?

The short-term car subscription segment is expected to gain significant traction in the car subscription market. This trend is driven by the increasing consumer preference for flexible and on-demand mobility solutions, particularly among younger generations and urban dwellers. Short-term car subscriptions, typically ranging from a few months to a year, offer users the flexibility to access vehicles for a limited period, catering to their changing transportation needs. This model appeals to consumers who require temporary access to a vehicle for specific purposes, such as traveling, event attendance, or short-term project work, without the long-term commitment and high upfront costs associated with traditional car ownership or leasing. Furthermore, the growing popularity of the gig economy and freelance work has created a demand for more versatile and on-demand mobility solutions. Short-term car subscriptions align with the needs of these consumers, who require access to vehicles for varying durations and may not want to commit to long-term ownership or leasing agreements.

The convenience and ease of use offered by short-term car subscription services, enabled by digital platforms and mobile applications, are key factors driving the adoption of this segment. Subscribers can seamlessly sign up, access their vehicles, and manage their subscriptions through user-friendly digital interfaces, enhancing the overall customer experience. Additionally, the rising environmental consciousness among consumers is also contributing to the growth of the short-term car subscription segment. Shorter subscription periods and the efficient utilization of vehicles within the subscription ecosystem align with the broader sustainability goals, making short-term car subscriptions an attractive option for eco-conscious consumers.

Gain Access to Car Subscription Market Report Methodology

https://www.verifiedmarketresearch.com/select-licence/?rid=240275

Country/Region-wise Acumens

How Does the North America Dominate the Car Subscription Market?

North America is estimated to dominate the car subscription market during the forecast period. The rising expense of vehicle ownership in North American cities has sparked interest in alternate mobility alternatives. According to the American Automobile Association (AAA), the average yearly cost of owning and operating a new car in the United States was $9,666 in 2021, or around $805 per month. In major cities, the cost may be substantially greater. For example, a Move.org survey from 2021 discovered that the average monthly cost of car ownership in New York City was $1,332, including expenses such as parking, insurance, and fuel. These hefty expenditures make car subscription services, which bundle these fees into a single monthly fee, an appealing alternative.

Furthermore, the expanding workforce of Millennials and Generation Z in North America, with varying attitudes on automobile ownership, is a big driver of the car subscription market. According to the Bureau of Labor Statistics, millennials became the largest generation in the US labor force in 2016, accounting for 35% of the workforce. According to a Deloitte 2021 report, 45% of Gen Z customers and 38% of Millennials question the need for automobile ownership, while only 28% of Gen X and 17% of Baby Boomers do. This shift in attitude among younger generations is generating a significant market in North America for flexible mobility solutions such as car subscriptions.

Will Europe Emerge as a Key Growth Region in the Car Subscription Market?

Europe region is estimated to exhibit substantial growth within the market during the forecast period. Europe’s stringent environmental policies and search for sustainable mobility are fueling the expansion of car subscription services, which frequently include electric and hybrid vehicles. According to the European Environment Agency, the EU aims to reduce greenhouse gas emissions from transportation by 90% by 2050, compared to 1990 levels. This has resulted in a spike in electric vehicle (EV) adoption. According to the European Automobile Manufacturers Association, battery electric vehicles and plug-in hybrids accounted for 18.0% of all new car registrations in the EU by 2021, up from 5.7% in 2019. Car subscription businesses that provide simple access to environmentally friendly vehicles are ideally positioned to capitalize on this trend.

Furthermore, the high cost of car ownership in Europe, combined with economic uncertainties, makes car subscriptions an appealing option. According to LeasePlan’s 2021 survey, the average monthly cost of car ownership in Europe varies from €743 in Greece to €1,138 in Switzerland. In comparison, car subscription businesses frequently provide all-inclusive packages at competitive rates. The economic consequences of recent events have also altered consumer behavior. According to Eurostat, 21.9% of the EU population was in danger of poverty or social exclusion in 2020, which may increase the attraction of more flexible and cost-effective mobility solutions like car subscriptions.

Competitive Landscape

The competitive landscape of the car subscription market is characterized by the presence of various players, including automakers, car rental companies, and specialized mobility service providers. These players are vying for market share by offering innovative and customized car subscription services to cater to the evolving needs of consumers. These players are continuously expanding their vehicle offerings, enhancing their digital platforms, and developing strategic partnerships to strengthen their market position and attract a wider customer base.

Some of the prominent players operating in the car subscription market include:

• Volvo Car Subscription
• Care by Volvo
• Porsche Passport
• Mercedes-Benz Collection
• BMW Access
• Audi Subscription
• Cadillac Book
• Lexus LO
• Clutch Technologies
• Fair

Latest Developments

• In January 2024, Volvo Car Subscription expanded its service to include all-electric models like the Volvo XC40 Recharge and C40 Recharge.
• In September 2023, Porsche Passport introduced the “Porsche Passport Elite” subscription plan, offering customers access to a wider selection of high-end and limited-edition Porsche models.

Report Scope

Car Subscription Market, By Category

Type:

• Luxury
• Economy
• Mid-Size

Duration:

• Short-Term
• Long-Term

End-User:

• Individual
• Corporate

Region:

• North America
• Europe
• Asia-Pacific
• Latin America
• Middle East & Africa

Research Methodology of Verified Market Research:

To know more about the Research Methodology and other aspects of the research study, kindly get in touch with our Sales Team at Verified Market Research.

Reasons to Purchase this Report

• Qualitative and quantitative analysis of the market based on segmentation involving both economic as well as non-economic factors
• Provision of market value (USD Billion) data for each segment and sub-segment
• Indicates the region and segment that is expected to witness the fastest growth as well as to dominate the market
• Analysis by geography highlighting the consumption of the product/service in the region as well as indicating the factors that are affecting the market within each region
• Competitive landscape which incorporates the market ranking of the major players, along with new service/product launches, partnerships, business expansions, and acquisitions in the past five years of companies profiled
• Extensive company profiles comprising of company overview, company insights, product benchmarking, and SWOT analysis for the major market players
• The current as well as the future market outlook of the industry with respect to recent developments which involve growth opportunities and drivers as well as challenges and restraints of both emerging as well as developed regions
• Includes in-depth analysis of the market from various perspectives through Porter’s five forces analysis
• Provides insight into the market through Value Chain
• Market dynamics scenario, along with growth opportunities of the market in the years to come
• 6-month post-sales analyst support

Customization of the Report

• In case of any Queries or Customization Requirements please connect with our sales team, who will ensure that your requirements are met.