Transportation preferences are evolving, with car sharing emerging as a convenient solution for many consumers looking to commute short distances. Although shared mobility has existed for decades, newer technologies allowing easier ride-hailing, car sharing, and vehicle subscription services are accelerating how people use personal vehicles.
While personally owned vehicles still dominate consumer transportation for the foreseeable future, the increasing adoption of car-sharing services represents an opportunity for auto dealerships. Dealerships can show consumers that they understand the shift toward alternative transportation needs and are ready to meet consumers with new products and services.
What is car sharing?
Car sharing is a short-term car rental service. Car sharing is a mode of car rental where individuals can book cars for short time periods, often by the hour. Car sharing is usually made available as a membership-based service that allows members access to vehicles that people can reserve for specific times.
Using Service Departments to Drive Revenue
This emerging community of car share owners represents a new segment for auto dealerships to cater to, specifically when it comes to the service department. The service department has historically been an essential component of a dealership’s bottom line. Auto dealers have a unique opportunity to build relationships with these smaller owners who may require more maintenance and repair services for their vehicles than a conventional car owner.
Compared to privately-owned vehicles, most car-sharing vehicles are high mileage and may require more frequent service. Combine that with many car-sharing operators being smaller, independently owned operations that lack the resources and infrastructure to serve their vehicles in-house, and auto dealers have an opportunity to use their service departments to drive revenue. Car-sharing owners will generally own multiple cars that will all need maintenance. An auto dealer can become the service center of choice by providing excellent customer service for local car-sharing owners.
Car-Sharing Vehicles Represent an Opportunity for New Car Sales
Given the nature of sharing cars and the high utilization of these vehicles, not only are they in need of more frequent maintenance, but they also have a higher replacement frequency. While a modern, privately owned vehicle may be expected to have a lifespan of up to 200,000, the average lifespan of most rental cars ranges from 25,000 to 40,000 miles. Some smaller car-sharing owners may choose to keep their vehicles in service longer than others, but with the added wear and tear they are likely to endure, they typically need replacement sooner than a privately owned car. Auto dealers can set themselves up for returning sales from car-sharing owners by establishing relationships with these high-volume, repeat customers.
Offering Subscription Services Can Provide Flexibility for Consumers
Auto dealers don’t need to be limited to only selling or leasing new or used cars. A recent trend among dealerships is offering car subscriptions, which may appeal to drivers that want a vehicle without the commitment of car ownership or the longevity of a traditional lease. Adding month-to-month car subscriptions may enable auto dealerships to reach a new customer base. These subscription services are also ideal for consumers waiting for a new custom car order, are between leases, or will only be temporarily in an area.
While many dealers choose to offer the vehicle, routine maintenance, roadside assistance, and insurance for one flat monthly fee, subscription services could be further customized for different service levels. Auto dealers can upsell or cross-sell additional accessories or services, such as pickup and delivery services, or have users may pay to access premium features, such as the ability to switch in and out of several different vehicles on demand. Car subscriptions can be wider than just a particular class of vehicles, and auto dealers can customize them to a specific customer.
How Will Car Sharing Affect Automotive Dealers?
Car sharing may slow the growth of vehicle sales. Still, it also introduces new opportunities for automotive dealers through larger fleet sales, subscription services, accelerated car replacement, and superior service departments.
Although car dealerships continue to face market disruptions, car sharing does offer several unique growth opportunities. Auto dealerships need to be agile, responsive, and customer-centered. With innovative ideas for automotive dealerships, Safeguard’s marketing experts can help you run your business more efficiently and promote it more effectively.
- The increasing adoption of car-sharing services presents new opportunities for auto dealerships.
- Auto dealers have an opportunity to build relationships with smaller car-sharing owners who may require higher levels of maintenance and repair services.
- Auto dealers can set themselves up for returning sales by establishing relationships with these high-volume, repeat customers.
- Adding month-to-month car subscriptions may enable auto dealerships to reach a new customer base.