The vehicle hire industry is shifting gears, thanks to changing consumer preferences and technological advancements. One of the most exciting developments in this industry is the emergence of car subscription services, providing a flexible and hassle-free alternative to traditional car ownership.

In this blog post, we’ll delve into the booming car subscription market, sharing valuable insights from Cocoon Vehicle Hire, a pioneer in the field, and highlighting the role of Prohire Software in driving this innovation.

Rhys Adams, Director at Cocoon Vehicles elaborates on the partnership: “We’ve been using Prohire for over 10 years. Whilst the software hasn’t been specifically written for subscription companies, working with the tech team we’re always finding new ways of using Prohire to fit in with our model and it works a treat. From a customer’s perspective, Prohire allows us to create a rental agreement along with the terms and conditions within 5 minutes. This can then be sent via e-sign to the customer, making the whole process very quick.

He adds: “We’re able to pull up customer records very quickly when it comes to enquiries, either within a contract or post the car goes back. In-house, the way it integrates with Xero is a godsend, and invoices can be raised and sent to customers automatically from the software, then imported into Xero with a few clicks of the mouse. Any support we need from Prohire is quick and efficient, with staff going out of their way to assist.”

The Emergence of Vehicle Subscriptions

Unlike traditional car leasing or buying, subscriptions offer an all-inclusive package covering insurance, maintenance, and other associated costs. This model is perfect for people nowadays who want flexibility, convenience, and a lifestyle without long-term commitments. As Rhys Adams from Cocoon Vehicle Hire notes, “Car Subscriptions” is the latest buzzword for flexible short-term solutions. Previously, these have been known as flexible car leases, flex leases, etc., and Cocoon has been offering these types of services since 2007.

Rhys states: “We saw a gap in the market of people wanting cars for 3-6 months but without the commitment usually found with car leases or even purchasing. Over the years we’ve just slightly changed our offering to reflect the buzzword subscriptions, we’re all used to paying out for them now whether it’s your TV streaming service, subscription food boxes or even for your digital well-being, so subscribing to a car is something people can relate to.”

Market dynamics and Growth

The car subscription market is accelerating rapidly, driven by several key factors:

Consumer Preferences: Today’s customers value experiences over ownership. The desire for flexibility and the ability to adapt quickly to changing needs has fuelled the demand for car subscriptions. Adams adds, “Whilst there is a cost-of-living crisis currently, customers still want the latest cars and are willing to pay the extra from a car subscription to drive the latest models without the long-term commitment.”

He adds: “We’re always welcome to evolve the way we offer our subscription services from customer feedback; we’ve looked at all sorts of things from inclusive insurance to alloy wheel damage inclusion. But customers just prefer the one payment that covers the essentials: the rental, maintenance, road tax, breakdown assistance and warranty, allowing some control for insurance options.”

Technological Advancements: Advances in digital platforms and mobile technology have made it easier for companies to offer seamless subscription services. Prohire Software’s robust platform is a prime example of how technology can enhance the customer experience, making the entire process smoother and more efficient.

Benefits of Car Subscriptions

Flexibility: Car subscriptions offer unmatched flexibility. Whether your customer needs a compact car for city driving or an SUV for a weekend getaway, they have options.

Cost Predictability: With an all-inclusive monthly fee, subscribers avoid unexpected expenses related to maintenance, insurance, and road tax. This predictability simplifies budgeting and financial planning. Prohire Software supports this model by providing detailed cost tracking and management features, ensuring customers are always aware of their expenses.

Sustainability: Many car subscription services, including Cocoon, offer a range of hybrid and electric vehicles. This allows environmentally conscious consumers to make sustainable choices without the long-term commitment of purchasing an electric car. Prohire Software helps manage these diverse fleets efficiently, ensuring that subscribers have access to the latest eco-friendly options.

Challenges and Opportunities

While the car subscription market is promising, it also faces challenges:

Market Awareness: Increasing awareness and understanding of the car subscription model is crucial. Many consumers are still unfamiliar with how it works and its benefits. Prohire Software aids in this effort by offering customer education and engagement tools.

Operational Efficiency: Managing a fleet of subscription vehicles requires efficient logistics and customer service. Technology plays a vital role in ensuring smooth operations and high customer satisfaction. Prohire Software excels in this area, providing comprehensive solutions for fleet management and customer support.

Competitive Landscape: As more companies enter the market, competition will intensify. Differentiating services through superior customer experience and innovative offerings will be key to success. Prohire Software enables companies to stand out by streamlining operations and enhancing service quality. Rhys Adams points out, “Pricing and stock has been a huge issue. Whilst we tried to be competitive, we had to price our vehicles to survive, and it has paid off with customers coming back to us. In terms of stock, EV’s residuals, interest rate rises, and the chip shortage have had a huge effect on stock. We’re thankful to some of our suppliers for not taking advantage of the raised used car pricing and holding on to their stock for a little bit longer.”

Future Outlook

The future of car subscriptions looks bright. As technology advances and consumer preferences evolve, the demand for flexible, convenient mobility solutions will only grow. Companies like Cocoon Vehicle Hire are well-positioned to lead this transformation, providing insights and expertise to shape the industry’s future. Prohire Software will continue to play a critical role in this evolution, driving innovation and ensuring that car subscription services meet the highest standards of efficiency and customer satisfaction.

For those looking to get into offering car subscriptions, processes are key. Adams advises:  “Using Prohire for your customer and vehicle management is a massive tool for any business, whether you’re starting with 1 car or 100 cars, to streamline those processes more effectively. By having a reliable system, you can then focus on the customer experience.”

The car subscription model represents a significant shift in the automotive industry, offering a flexible, convenient, and sustainable alternative to traditional car ownership. With industry leaders like Cocoon Vehicle Hire driving innovation and excellence, the future of mobility is set to be more dynamic and accessible than ever before. Embrace the future of driving with car subscriptions and experience the freedom of mobility without the strings attached.

Author: Molly Curtis

1st Jul 2024