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Cadillac Book Luxury Subscription Service

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Tony Do

Tony Do

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Jun 7, 2016
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Tony
#1
What are your thoughts on this program?

Here are some articles to reference.
The details as quoted from Cadillac Pressroom,

"A flat monthly fee of $1,500 eliminates the hassles of car ownership so members can experience uninhibited driving. Membership is month-to-month with no long-term commitment required. Members can use a mobile app to reserve vehicles that will be delivered to their specified locations via a white-glove concierge service. Certain location restrictions apply. Members will have access to the current year Platinum Level Trim Cadillacs, including the XT5, CT6, Escalade and V Series. Registration, taxes, insurance and maintenance costs are included in the monthly rate and there is no limit on mileage. Other fees may apply."

Positive:
  • Inclusive Fee for insurance, registration, taxes and maintenance costs.
  • Mobile App - A positive or negative depending on how the interface of the app is.
  • No long term commitment.
Negatives:
  • "Other Fees may apply"
  • Cost of Inclusive Fee seems a bit high.
  • How available will all models be?
Here are my thoughts, I think Cadillac has done something awesome with bridging the gap between purchase and leasing. However, I do think the model should be revised with a tier plan.

Tier 1 - $800.00 Monthly
  • ATS Base
  • CTS Base
Tier 2 - $1000.00 Monthly
  • ATS Premium/Luxury
  • CTS Premium/Luxury
  • XT5 - Not sure of what trim should be here
Tier 3 - $1200.00 Monthly
  • All models and trims available
My last questions are further reaching. How will this affect depreciation? If they have a large number of customers who subscribe to this plan then there will be a larger number of used vehicles cycling. Will this affect values in the used market, and will depreciation take a hit? Cadillacs aren't known to depreciate well, and I'm sure that's why they decided on $1500.00 as the entry to subscribe.

Me personally, I wouldn't mind a few more CTS-V's flooding the market and depreciating. :)

Feel free to discuss.
 
Last edited:
Dominion DMS
#2
Tony Do said:
What are your thoughts on this program?

Here are some articles to reference.
The details as quoted from Cadillac Pressroom,

"A flat monthly fee of $1,500 eliminates the hassles of car ownership so members can experience uninhibited driving. Membership is month-to-month with no long-term commitment required. Members can use a mobile app to reserve vehicles that will be delivered to their specified locations via a white-glove concierge service. Certain location restrictions apply. Members will have access to the current year Platinum Level Trim Cadillacs, including the XT5, CT6, Escalade and V Series. Registration, taxes, insurance and maintenance costs are included in the monthly rate and there is no limit on mileage. Other fees may apply."

Positive:
  • Inclusive Fee for insurance, registration, taxes and maintenance costs.
  • Mobile App - A positive or negative depending on how the interface of the app is.
  • No long term commitment.
Negatives:
  • "Other Fees may apply"
  • Cost of Inclusive Fee seems a bit high.
  • How available will all models be?
Here are my thoughts, I think Cadillac has done something awesome with bridging the gap between purchase and leasing. However, I do think the model should be revised with a tier plan.

Tier 1 - $800.00 Monthly
  • ATS Base
  • CTS Base
Tier 2 - $1000.00 Monthly
  • ATS Premium/Luxury
  • CTS Premium/Luxury
  • XT5 - Not sure of what trim should be here
Tier 3 - $1200.00 Monthly
  • All models and trims available
My last questions are further reaching. How will this affect depreciation? If they have a large number of customers who subscribe to this plan then there will be a larger number of used vehicles cycling. Will this affect values in the used market, and will depreciation take a hit? Cadillacs aren't known to depreciate well, and I'm sure that's why they decided on $1500.00 as the entry to subscribe.

Me personally, I wouldn't mind a few more CTS-V's flooding the market and depreciating. :)

Feel free to discuss.
Click to expand...

I'm excited to see how this is going to play out as I think there is a component of the luxury segment that would love to pay one fee per month and have lots of flexibility on vehicles. I'm curious to see how this plays downmarket with other brands. Lastly, I'm really interested to see how Cadillac dealers react as I imagine they will perceive that every Book subscriber will represent a lost retail sale.
 
#4
It sounds like a program that is difficult to execute well. It's kind of a logistical nightmare and the expectations are really high. There's a component to this that's nice, though, and that's having access to a SUV or sedan depending on travel scenarios. I'm curious if anyone knows the dollar figure for allowable lease deductions for business owners or the self-employed? I thought there was an exemption from lease deductions on luxury vehicles but I'm not sure the actual dollar amount - I thought it was closer to $1k/mo
 
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