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Beepi and Vroom and Carvana - will they make a DENT?

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#261
Back of the napkin thoughts...
The penetration rate of the subscription concept depends on...
  1. The subscription payment itself.
  2. The 'gap' between the subscription payment and buying the car outright.
  3. Tradein liquidity.

In Kevin's video, they're seeing demand for higher end units. It's easy to see that there can be buckets of subscriptions (e.g. Silver, Gold, Platinum). That'll raise penetration rates.
 
#262
Cullen C said:
I agree that subscription service is a sexy alternative that allows dealers to potentially capture two ends of the market. The higher end of the market where a consumer values flexibility enough to pay a premium(sometimes significantly more than a traditional lease.....or two). As well as the lower end of the market where a person is subscribing to a car(without the inconvenience of a credit check) that will allow them to get into a car and use that car as a means of income, essentially having it pay for itself. The later option is potentially a bigger market opportunity, potentially disrupting the buy here pay here market.
Click to expand...

Fascinating. Add to this ppl that are over-miled on their lease and need to get out.
 
#263
Subscription sales are simply car rentals coming into the Dealer Retail space. It does create a totally new dealer experience, but...

D.I.M.M.?
(Does It Make Money?)
Can selling Subscription's pass the DIMM test? Fleet mngt is key. Inventory costs ride with interest rates. Frequent Flipping must add to costs.

Subscriber to Sale Ratio?
IMO, for dealerships, subscriptions could be an amazing on-ramp to a future sale. The experience should create amazing water cooler stories and produce a whole new source of high lifetime value consumers.
 
#264
Well, I tell you what, if that leasing subscription model does become successful, I know a company that is going to jump directly into that model, especially now that they have actually started selling cars.

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https://www.enterprisecarsales.com
 
#267
I've been thinking about this program some more today and I'm struggling to understand the economics behind it. Maybe someone can clarify this, but this program can't ever be as affordable as leasing or financing for new OR used, period. The costs in administration, customer service, servicing and delivering the vehicles, etc. cannot even come close. I don't see how this can be feasible at the lower end of the market. To me, this program basically allows a customer to enjoy the same benefits as dealership employees (that get demos), except they pay for it.
 
#268
Chris Cachor said:
I've been thinking about this program some more today and I'm struggling to understand the economics behind it. Maybe someone can clarify this, but this program can't ever be as affordable as leasing or financing for new OR used, period.
Click to expand...

Mornin' Chris,
Subscriptions aren't for everyone. But, let's recall that not all car shoppers are left-brained and analytical. Actually, it's not a far reach to say that most car shoppers are driven by emotions and whats more FUN than experiencing new cars WITHOUT a long-term commitment!!

If Subscriptions comes to my town I am ALL IN. For me, the car shopper, it's gotta be the best test drive experience of all time. For me the Car Dealer CMO, it's got to be the best brand experience a dealer ever created. AND, the Subscription customer has to be the best 'road to a sale' ever made.
 
#269
Used car site Vroom lays off staff, 25%-50% says source, as it halts Dallas and Indiana operations
https://techcrunch.com/2018/03/05/u...ce-as-it-halts-dallas-and-indiana-operations/

The layoffs come in the wake of tumultuous times for some of Vroom’s other competitors.

In the UK, both Carspring and Hellocar shut down last year. Shift, meanwhile, laid off staff and paused operations in at least one market, but also eventually raised more funding led by BMW.

Perhaps biggest of all was Beepi, which blew through $150 million in funding before two potential sales fell through and it was sold for parts.
 
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