Transparent costs, all-inclusive: Swiss study shows potential of car subscriptions

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The Swiss mobility barometer underlines the importance of individual mobility. After all, 77 percent of households have a car. It also makes it clear that the emotional connection with the vehicle is not very good. For three-quarters of those surveyed, it’s just a commodity. Two more points stand out:

1. The total cost of a car is greatly underestimated.
2. Many people are skeptical of car subscriptions due to their supposedly high prices.

As the survey shows, the majority of drivers purchase their vehicles. A smaller proportion uses leasing, i.e. long-term rental of the car. In both cases, users must pay for maintenance, insurance and taxes themselves, as the Swiss Mobility Barometer points out.

Costs are grossly underestimated

Another finding of the research emerges here: The population, on average, significantly underestimates the monthly costs of their cars. They charge around 300 francs for depreciation, maintenance, insurance and taxes (excluding fuel and parking costs).

On the other hand, TCS budgets the monthly cost for a mid-range car at 635 francs. For comparison: With a car subscription from Carvolution you can get a Ford Puma from 549 francs per month – everything except fuel or charging power is included in the price. In total, the Swiss subscription provider offers around 20 models for less than 635 francs per month. This shows that the car subscription is quite attractively priced.

According to the study’s authors, this incorrect assumption is likely because insurance, taxes or maintenance expenses are incurred irregularly throughout the year rather than on a monthly basis. At the same time, impairment is not taken into account sufficiently.

Léa Miggiano, co-founder of Carvolution, knows these misconceptions all too well. Since it launched car subscriptions in Switzerland five years ago, subscription fees have been criticized as expensive. «Higher monthly fees with subscription are misleading. Since the vehicle subscription is an all-inclusive price, additional costs such as comprehensive insurance, taxes and maintenance are included. All of these costs are added to the price when renting,” Miggiano emphasizes.

The advantage of subscription is acknowledged, but…

According to the mobility barometer, having your own car is somewhat or very important for 70 percent of Swiss people. By contrast, only eight percent are likely or very likely to imagine using a car subscription in the near future.

How can this skepticism be explained? Using rather than buying has long been established in many areas. Is your own vehicle model not known enough in the subscription?

Miggiano believes this is also due to the incorrect assumption of total costs. Almost half of those surveyed said they would not spend more than 250 francs a month on a car subscription. The third expects realistic expenses of up to 500 francs per month.

Study participants interested in the car subscription model were even more willing to pay. Survey respondents likely took operating costs into consideration.

Purchase price eliminated

Survey participants see the biggest advantage of the subscription as the elimination of the high purchase price of the car. For 70 percent, administrative simplification is a key reason for subscription.

The truth is: Car subscriptions on Carvolution can often be obtained without a down payment. It is amortized to the customer and is flexible in terms of duration and mileage package. The fixed monthly price includes insurance, taxes, maintenance, service and tires. This allows full cost control.

What is interesting is that the subscription model appeals to car enthusiasts as well as pragmatists. According to the survey, slightly more middle-aged men are interested in subscriptions. City and country are almost evenly balanced, but people who have rented before are more interested in subscribing than buyers. Maybe because they already know the advantage of using it instead of buying it.

• Costs that can be clearly calculated thanks to the fixed monthly price.
• Flexibility in terms of working times and mileage packages.
• It is not a high initial investment.
• All expenses are included except fuel and parking.
• Everything from a single source, with no administrative effort required.
• Easy way to change tools or technology.

All these points were mentioned as advantages of subscription in the Swiss Mobility Barometer. Both those who are skeptical of car subscriptions and the eight percent who are more or less likely to want to switch to a subscription model.

According to German automobile expert Ferdinand Dudenhöffer, music, movies and things that are already the norm in smartphones will also become normal in cars. It predicts that subscription will have a 40 percent market share by 2030.

Source: Blick