republican debate

Expert: Consumers don’t want ‘bizarre’ new car subscriptions

  • Automakers are introducing subscription-based services for vehicle features
  • The offerings range from enhanced hands-free driving to heated seats
  • Car dealer Tom Maoli: 'It's actually insulting for the consumer'

(NewsNation) — In an era where subscriptions dominate our digital lives, it appears that luxury car manufacturers are eager to jump on the bandwagon.

While the concept of monthly car payments has been the norm for many, automakers are now eyeing an additional source of revenue by introducing subscription-based services for vehicle features.

While some consumers are enthusiastic about the development, it’s earned the ire of others.

The trend was highlighted recently by BMW, which showcased its subscription model for vehicle add-ons such as the high beam assistant. With the simple press of a button, BMW owners can now unlock additional features for their vehicles via the “Connected Drive Store,” raising questions about the necessity and affordability of such services.

“It’s an interesting concept,” said Tom Maoli, CEO and dealer principal of six New Jersey car dealerships. “Everybody’s trying to be Apple, that’s what’s going on, everybody’s trying to get a subscription and our monthly fee. But the reality of it is … the consumer only has so much bandwidth, and they’re not buying into it.”

The offerings range from enhanced hands-free driving experiences to heated seats and theft detection systems, all available for an additional monthly fee.

Maoli said the subscription model has not been universally embraced by consumers.

“It’s actually insulting for the consumer because, you know, high beams, you’re gonna charge me to put high beams on automatically?” Maoli said. “I mean, these are things that historically were added to the car to get the consumer to come in and buy it. And now we’re going to charge them for everything.”

A recent survey revealed that 75% of car buyers are opposed to features being locked behind subscription paywalls when purchasing a vehicle.

The soaring prices of new cars have been partly attributed to the push towards electric vehicles. As car manufacturers struggle to make profits in the EV market, they are seeking alternative revenue streams, such as subscription services.

“It’s kind of bizarre,” Maoli said “And you know, I don’t know where the whole thing is going. But I think this all revolves around the whole electrical vehicle market.”

These monthly income streams can help offset the costs associated with developing and marketing electric vehicles. However, as gas prices continue to rise, reaching a 10-year high seasonally, EV adoption remains slow.

Critics argue that the Biden administration’s agenda for electric vehicles is failing, and consumers are bearing the brunt of the increased costs of owning and maintaining automobiles.

“It’s costing consumers billions of dollars,” said Maoli. “And the car companies are pushing this all back to the consumer.”

As automakers aim to strike a balance between profitability and consumer satisfaction, the future of car subscriptions remains a topic of debate.

On Balance with Leland Vittert

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