Opinion: Car subscriptions suddenly make more sense in these times
As millions of cars sit around unused in the midst of the global lockdown, the coronavirus pandemic may actually be a catalyst for some major changes in the way consumers “buy” cars.
There is no question about how important it is right now to be well-positioned digitally. Companies who have created solid online platforms that facilitate access to core necessities are currently winning. When it comes to the automotive space, it is still very traditional, having to piece together many disjointed services such as bank loans, insurance, roadside assistance and your car dealership — a process which hasn’t changed in over 100 years.
Traditional retailers are facing huge challenges in selling or renting cars right now as physically visiting dealerships and rental offices is not possible. People are looking for digital access to individual mobility today more than ever. “Access, not ownership” is the future, where we live in an era of Netflix, Spotify and XBox Game Pass. Younger generations will not want to lock up their hard-earned money in depreciating assets like cars, but rather pay for access to the car they want, when they want. Globally manufacturers, dealerships, rental car and technology companies are all working to bring new ownership models to the table for consumers.
Since the pandemic has struck, the value of a subscription model for cars is more obvious than ever. If you don’t drive to work and shop in the supermarket around the corner, you don’t need a car, so why would you want to keep paying the loan, insurance and registration on it. You should be able to simply stop or pause your subscription, hand the car back and schedule a delivery for when you need a car again.
We launched Carasti, a car subscription app, in 2019 as a response to this major trend which is now being accelerated by COVID-19. Our business processes are fully digital. Customers book online via our app, we are connected to our partners via a digital platform and internal communication takes place via email, chat and video conferences. There are cars in our fleet to suit every taste and budget, starting at Dhs 1,270 monthly with no deposits, no paperwork, no long-term commitments, and a fully-disinfected car delivered to your doorstep within 4 hours of booking.
In these unprecedented times, people who normally use public transport or ride-sharing services want to be in their own vehicle, in order to avoid the risk of infection from strangers. They also want flexibility without needing to be committed to a vehicle and a loan for a long period of time, especially as a steady income is uncertain nowadays.
After a phase where chauffeur-driven ride-sharing (Uber, Careem) and self-driven shared cars (Udrive, Ekar) were gaining prominence, the latest developments are reviving the trend towards personal transport. Your own car as a protected space is gaining in importance again.
And as we are going through an economic crisis, mobility remains a basic need even in such a phase. The previous offers of cash purchase, classic financing or leasing meant long-term commitment. Nobody wants to take this risk in economically uncertain times. Car subscriptions are a flexible, predictable and cost-effective alternative.
Also, booking a car subscription via Carasti is fully digital and is therefore contactless. Advice is given by phone, chat and email. The customer does not even have to leave the house except to receive the car.
The writer is founder & CEO of Carasti. The app is available in Apple and Google Play stores. Use the code DRIVEARABIA150 for a Dhs 150 discount in the first month.