These New Car Rental Subscription Programs Will Get You There

Donna Choate discovered a car rental subscription program by accident.

She needed a new car, but she wanted to avoid the hassle of ownership — the auto loan, insurance and maintenance. Was there something that let her skip all of that?

That’s when Choate, a podcaster from Atlanta, heard about Hertz My Car, a new option that’s billed as an alternative to vehicle ownership and leasing. For $1,100 a month, which includes the cost of the vehicle and basic insurance, she drove away in a new Infiniti Q60.

“I loved the idea of having flexibility with a car,” she says. “I don’t worry about maintenance and basic insurance is included. When those are factored in, it can be less than owning a vehicle.”

An industry shift to car rental subscription programs

Hertz, which earlier this month expanded Hertz My Car nationwide, isn’t alone. The car rental industry is gearing up to offer subscriptions to drivers like Choate who want transportation without the burden of ownership. They’re competing with car manufacturers, which already have well-established subscription programs.

“A one-size-fits-all transportation approach just doesn’t work for customers anymore,” says Kyle Sabie, assistant vice president for Enterprise Holdings.

Enterprise last year launched a similar program, Subscribe with Enterprise, in several U.S. markets. Sabie says Subscribe by Enterprise is part of an industry-wide shift in the car rental industry. Increasingly, auto rental firms see themselves in the transportation business and are trying to give their customers more options for getting around.

Which rental companies are offering car rental subscription programs?

Subscribe with Enterprise

The program, launched in May 2019, gives its subscribers access to over 20 makes and models, with the ability to switch vehicles up to four times per month. It’s available in Minnesota, Missouri and Nevada. Subscribe with Enterprise also offers damage protection, vehicle maintenance, roadside protection and up to 3,000 miles per month. Pricing varies by state. In Minnesota, for example, there’s a $250 enrollment fee as well as a $1,499 monthly subscription fee.

Hertz My Car

The car rental company’s new program allows subscribers to choose from three monthly subscription tiers, starting at $599 a month. That will put you into one of Hertz’s economy, compact or mid-size sedans while its other tiers offer SUVs, trucks, full-size and luxury sedans. The all-inclusive monthly subscription covers vehicle maintenance, roadside assistance, limited liability protection and vehicle damage. Vehicle damage protection isn’t included with the lowest tier, but you can add it for an additional fee.

Sixt+

Launched in September, the car rental company says Sixt+ is a flexible form of individual mobility. Its monthly rate, which starts at $459, covers usage of the car and vehicle-related costs such as registration, dealer costs and routine maintenance and service fees. You can return your vehicle after a month and swap it out for another one. If you want to buy the car, Sixt offers a credit valued at one month’s base rate of your Sixt+ subscription.

New car rental subscription programs programs join a crowded field

The new car rental subscription programs join an already crowded field of subscription options. Car manufacturers took an early lead in subscriptions, with programs like Care By Volvo offering drivers an option between renting and buying. Care By Volvo is a 24-month subscription lease program, but you can cancel your subscription and return the vehicle any time after the first four months.

Paul Chambers, CEO of the Subscription Trade Association, says subscriptions are growing in popularity. Manufacturers like Volvo launched their programs almost as an afterthought — for example, the launch of the Care By Volvo program was timed to assist with one of the company’s launches of one of its compact SUVs.

“The program has been successful for them, and as subscriptions evolve, more companies are leading with it and fully integrating it into their business model, not just as an add-on,” he says.

Which car rental subscription program is right for you?

The car rental subscription programs are not widely available yet, and are so new that a true side-by-side comparison is difficult.

The most obvious difference is in vehicle variety, says Richard Reina, the product training director at CARiD.com.

“Subscription programs available through rental car providers allow access to models across a variety of car makers,” he says. “With a manufacturer subscription plan, you’re only able to select from that manufacturer’s lineup.”

Availability is also a consideration, says Reina.

“With Hertz’s latest announcement, their subscription program vehicles will be available nationally at any of their corporate U.S. locations,” he says. “Most of the manufacturers are still only piloting these offerings in select cities. Enterprise is in that boat as well, with car subscriptions only available in Minnesota, Missouri and Nevada.”

New car rental subscription programs are based on demand

When considering a car rental subscription program, it helps to know a little about what’s happening behind the scenes. Car rental companies design these programs based on local and inbound revenue forecasts.

“Subscription models are designed by revenue managers based on the business plan and targets for the specific year,” says Anup Dhiraj, director of car rentals for RateGain, a provider of travel and hospitality information.

That means your subscription program can change from year to year, and even month to month, depending on demand.

There are some drawbacks to subscription programs. In most cases, a vehicle subscription is more expensive than traditional vehicle ownership or leasing, says Melanie Musson, who covers car subscriptions for the car insurance site CarInsuranceComparison.com.

“The increased monthly cost is worth it if you have the budget for it and you decide it’s worth the peace of mind that a subscription brings,” she says. “With a subscription, you’ll always have a late model vehicle that works well. If the vehicle causes you trouble, you’ll get a new one.”

Ultimately, you may be better off with another transportation option, according to Brandon Barron, a frequent traveler who works for the timeshare exit company Linx Legal.

“You can cancel most any car reservation without penalty at any point,” he says. “So why lock yourself into something that you may never use properly?”

How to decide if a new car rental subscription program is right for you

Should you consider subscribing to a car through a car rental company? Here’s how to decide:

Do it if you:

• Need a car for more than a month.
• Like the simplicity, convenience and predictability of the program.
• Require the flexibility to swap out cars.
• Have the budget.

Don’t do it if you:

• Just need a car for a few days here and there. Try renting or ridesharing instead.
• Like a full breakdown of your expenses.
• Don’t want to sample different cars.
• Are on a limited budget.

Car rental subscription programs are just starting to rev up. Rental companies will add options as they evolve into transportation companies.

About the Author

Christopher Elliott is the founder of Elliott Advocacy, a 501(c)(3) nonprofit organization that empowers consumers to solve their problems and helps those who can’t. He’s the author of numerous books on consumer advocacy and writes weekly columns for King Features Syndicate, USA Today, and the Washington Post. If you have a consumer problem you can’t solve, contact him directly through his advocacy website. You can also follow him on Twitter, Facebook, and LinkedIn, or sign up for his daily newsletter.

Source:forbes.com