Last week General Motors announced Book by Cadillac, a first-of-its-kind subscription service for luxury cars. In exchange for a flat monthly fee of $1,500, Book members get access to select Cadillacs and can even switch vehicles when needed to suit their various needs. Using the Book mobile app, members reserve a vehicle to be delivered to their location by a “white-glove concierge service.”
“Book by Cadillac is an innovative new option targeted at a growing class of luxury drivers searching for access to various cars over time, dependent on their individual needs, coupled with a hassle-free white-glove exchange,” said Uwe Ellinghaus, Cadillac chief marketing officer, in a statement.
The arrangement is month-to-month without the long-term commitment of leasing or buying a vehicle. Vehicles available via BOOK include current year Platinum Level Trim Cadillacs such as the XT5, CT6, Escalade and V Series. Subscribers can exchange their vehicles up to 18 times per year. All vehicles include OnStar service, a 4G LTE Wi-Fi hotspot and Sirius XM radio.
Mileage is unlimited, and costs such as registration, taxes, insurance and maintenance are included in the $1,500 monthly subscription fee. Initially, Book will launch in the New York metro area. Prospective members can join the waitlist on the BookbyCadillac.com website. If the trial is successful, GM will roll Book out into additional markets.
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“With maintenance, insurance and detailing of the vehicle handled by Cadillac, members are freed from the baggage that comes with traditional vehicle ownership and given the freedom and flexibility to fit their lifestyle,” GM said in the announcement.
To qualify, potential members must be at least 18 years of age, must apply and be approved, possess a U.S. state-issued driver's license in good standing, meet the eligibility requirements, and accept member agreement terms and conditions and OnStar and XM terms and conditions. Review and approval typically takes two days.
GM is calling this the first-of-its-kind subscription. Well, sort of. Car manufacturer Hyundai announced a subscription service for its Ioniq electric car in November. The Hyundai program is a hybrid of a traditionally purchased car and a leased car. Clutch also offers luxury car subscriptions, but they are not operated by the original equipment manufacturer (OEM) like Book. With Clutch, subscribers pay a monthly fee and can switch vehicles as often as daily. They also offer a concierge service and a package price that includes insurance, maintenance, taxes, roadside assistance and more.
These vehicle subscription services are taking the monthly subscription model and applying it to high-end products. They are also creating hybrids of various car ownership and rental models to see what works for different types of consumers. Clutch and Book are appealing to a luxury car client, while Hyundai's subscription will appeal to a driver who is environmentally conscious but who also wants a hassle-free experience. In other words, each program is similar but it has a niche audience.
These programs are slowly rolling out, but we anticipate that more manufacturers and entrepreneurs will experiment with these models. The keys to their success will be whether there is an audience for these types of services, pricing the services so the companies make a profit, and being nimble and making adjustments to the model quickly if changes are necessary.