The North American car subscription market size was valued at USD 818 million in 2021. It is projected to reach USD 10,329 million by 2030, growing at a CAGR of 33.5% during the forecast period (2022-2030).
A car subscription is a service where a client pays a regular fee for using one or more automobiles. Some automobile subscriptions include insurance and maintenance in the subscription fee, while others permit the subscriber to exchange automobiles during the subscription period. According to industry analysts, an automobile subscription is an alternative to buying or leasing a car. The subscription service keeps vehicle ownership, distinguishing it from owning a vehicle. Contrarily, automobile rental necessitates the acquisition of vehicles for specific dates or journeys.
A car subscription is a short-term contract to own a vehicle that does not charge the customer for maintenance or insurance. Moreover, according to the service provider-consumer contract, a car subscription allows for several car exchanges. OEMs and dealers in the North American vehicle subscription sector have a tremendous chance to develop new services to fulfill expanding demand. Given the area's expansive landscape, launching a successful car subscription service looks more challenging. A small number of automakers and numerous other companies in North America provide car subscription services.
Among the benefits of a car subscription are switching between many vehicles and shorter-term service agreements. Long-term, a subscription is more expensive than leasing or purchasing a car. Options for automobile subscriptions include monthly billing cycles and mileage restrictions. An automobile subscription has a higher monthly premium than leasing or buying a vehicle for over two years.
In addition, most service providers impose a mileage limit on cars for a specified period; violating this limit results in additional expenses for the end user. These monthly servicing fees and other costs are negligible when leasing or owning a vehicle. In the coming years, the high price of the subscription model will likely hinder the demand for car subscriptions.
Acquiring a vehicle through subscription programs in North America is straightforward, with a single monthly payment covering the vehicle's purchase price, maintenance, registration, and insurance. The sole cost for the subscriber is the gas or electricity required to drive the car. Frequently, they can lease a vehicle and subscribe to automobiles for shorter durations. Canceling a subscription is more straightforward and less expensive than terminating a car lease.
The car subscription market is segmented by Subscription Type, Subscription Period, Service Provider and End-Use.
The car subscription market is divided based on the subscription type into single-brand and multi-brand segments.
The multi-brand market dominates the segment is expected to grow at a robust CAGR of 35% because it allows subscribers to switch between brands, increasing flexibility and convenience.
The car subscription market is segmented based on the subscription period into 1 to 6 months, 6 to 12 months, and more than 12 months.
The 1 to 6 months subscription period dominates the segment and is anticipated to increase at a respectable CAGR of 33.8% during the predicted period.
The car subscription market is segmented based on the service provider into OEM/captives, mobility providers, and technology businesses.
Independent/third-party service providers are anticipated to rule the market with a CAGR of 31.5% during the forecast period.
The market for car subscriptions is divided into two categories based on end-users, namely private and corporate.
The corporate segment dominates the market and is anticipated to grow at a CAGR of 30.9% during the forecast period.
North America dominates the global market and is expected to grow at a CAGR of 33.5% during the forecast period. The increasing demand for intelligent mobility and the environmental consciousness of consumers primarily drive the North American market. Investments in booming creative urban locations, improvements in fleet management across all modes of transportation, and a shift in attitude toward shared mobility would create the lucrative potential for the automotive subscription business. Increased demand for more efficient urban mobility solutions, technology improvements, and vehicle and driver safety concerns have contributed to the region's rise. The leading market participants are utilizing various strategies to strengthen their market position. In addition, they are continuously involved in product development to fulfill the increasing needs of the end customer and maintain a competitive advantage.
Hertz Global operates the vehicle rental brands Thrifty, Dollar, Firefly, and Hertz. In addition, it offers the car-sharing membership service Hertz 24/7. Globally, the corporation has over 10,200 franchisees and company-owned vehicle rental outlets. It offers automobiles via Rent2Buy and Hertz Car Sales. The corporation provides services in 150 countries, headquartered in Estero, Florida, United States.
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