New vehicle sales have been booming in the U.S. for years now, but the winds of change are blowing so briskly behind the scenes that there’s a decent chance that the next new car you buy will be the last one you own.
Hang on… are you sure?
Well, not exactly. But while 17.6 million new light-duty vehicles were sold last year, marking the fourth highest total in U.S. history and a 0.6-percent increase over 2017, what those numbers fail to reflect are all the myriad ways that traditional car purchasing and ownership are changing, likely for good.
A Numbers Game
That massive sales figure was accompanied by an over 4-percent increase in the average price of a new car, on one hand, and loan amounts, terms, and delinquencies have increased significantly as well. A record 7 million Americans are three months or longer behind on their car payments, pushing auto loan debt to over $1 trillion for the first time.
It’s not all sales prices and loans, either. For the first time, millions of Americans living in or around major urban areas have numerous alternatives to car ownership, and if you’re one of them, it may be worth doing a cost/benefit analysis to see whether owning a car is still worth it.
So, beyond the numbers, what are the behind-the-scenes factors changing the car ownership landscape? Subscription services and car- and ride-sharing apps are making the biggest splash, but other transportation options are starting to have their say as well.
Why buy when you can subscribe?
The biggest change to the world of car ownership isn’t so much of a change as it is a re-thinking of what it means to pay for and use a new vehicle. Several “subscription” services have popped up in recent years, both from third-party companies and the automakers themselves, but what does “subscribing to a car” actually mean?
We’ve given a thorough outline elsewhere and determined whether they’re smart or silly, but vehicle subscriptions are popular already and spreading fast, so it’s not unfeasible to believe they’ll be nationwide within a matter of years.
Basically, a vehicle subscription plan works like your smartphone: you pay a fixed monthly fee for access to the device (in this case, a vehicle), a certain amount of usage (miles instead of data and minutes), and other related services like insurance, roadside assistance, and more depending on the provider and the cost. Like a smartphone, the better the device and related services, the more you pay.
Naturally, this model has made its way to the premium manufacturers first, with the most widespread example coming from Volvo in the form of their Care by Volvo service, which gives a fixed monthly price to the XC40 crossover and S60 sedan for certain trims and options, and also bakes in mileage, maintenance, and even insurance.
Audi, BMW, Cadillac, Jaguar, Land Rover, Lexus, Mercedes-Benz, and Porsche all have some form of subscription service as well, but usually only in certain geographical areas and generally at a higher price. There are also third-party services that offer more affordable new vehicles like Canvas, which is only available in California at the moment but offers mostly Ford brand vehicles and is backed by the blue oval’s financial arm.
While the jury’s still out on whether it’s better to buy a new vehicle and incur all the related costs or subscribe, many Americans are trying out vehicle subscriptions, and that number is likely to increase down the line.
More ways than ever to go car-free
Between ridesharing apps like Uber and Lyft, car sharing services like Zipcar and Maven, and even rideables like Bird and Lime, there are more ways than ever to get around without the need to own a car, especially if you live in a major urban area.
Unsurprisingly, ride-hailing has made its way into many of our lives and is on the rise, with the number of Americans using a service like Uber or Lyft more than doubling since 2015. Naturally, these apps are more popular among city-dwellers, but for those who don’t need to drive often, ridesharing can be a convenient option.
For the times that you do absolutely need a car, however, car-sharing services like Zipcar make one available in your area for as low as $7 per month and an extra fee per hour. Compared to the over $8,800 annual average cost of owning a new vehicle in the U.S., this can represent a massive savings if you don’t drive on a daily basis.
There are solutions for those in-between journeys as well, for when public transportation isn’t available (or isn’t cooperating…) or just for distances that are too long for walking and too short for driving. Bird and Lime make electric scooters available in many U.S. cities for just cents per minute, and are extremely easy to use so long as you keep safety and courtesy in mind.
With vehicles getting more expensive, the car ownership landscape changing drastically, and more options than ever for going car-free, you may find sooner rather than later that your vehicle needs are changing too.