Car companies talk about car-sharing as a new experience, but consumers have already started the process, just in the form of automobile leasing.
Leasing vehicles have been on the rise, and the Experian analyst group says that there is a strong resurgence in leasing, versus owning. Anecdotally, some of this has to do with people not wanting to own a car; some customers only want to own a car as long as the warranty is valid.
Ford Motor Co. has already said it would start group-leasing for its car-sharing program called Ford Credit Link. Getaround has partnered with Audi, “Lease a 2015 Audi A3 for Zero Down, $399 a month for 36 months. Or get comparable leasing discount on nearly any other model. Want to buy an Audi instead? Get at least 10% off MSRP any 2015 Audi you want. You will not find a better deal. Lease a 2015 Audi A3 for Zero Down, $399 a month for 36 months. Or get comparable leasing discount on nearly any other model. Want to buy an Audi instead? Get at least 10% off MSRP any 2015 Audi you want. You will not find a better deal.” They sweeten the deal by telling potential buyers, “Share your car and earn more than enough to pay for it. In fact, in your first year, we will even guarantee earnings between $3000 to $6000 (depending on where you share your car).”
Uber and Lyft, two car-sharing programs (General Motors just acquired a percentage of Lyft) car drivers don’t necessarily own their vehicles, they will lease them as well. Leasing groups, such as the Breeze market directly to the car-sharing driver, “Get a flexible, week-to-week lease with Breeze so you can drive for services like Uber and Lyft.”
Just last week, Lyft and General Motors announced the launch of Express Drive, a flexible, all-inclusive rental program that will give Lyft drivers access to cars at affordable rates whenever they need them. This new program comes just two months after GM struck a strategic partnership with Lyft and invested $500 million as part of Lyft’s $1 billion Series F round.
Express Drive begins later this month in Chicago and will soon roll out to Boston, Washington, D.C., and Baltimore, as well as many other metro areas throughout the year. Last year in Chicago alone, 60,000 people applied to drive with Lyft but didn’t have a qualifying car. Express Drive solves this problem and offers millions of potential drivers a dynamic way to earn money while driving on the Lyft platform.
The press release goes on to say, “For active Lyft drivers who meet a certain ride count each week, there’ll be no weekly rental cost. In short: The more you drive, the less you pay. In addition to affordability, Express Drive includes insurance and standard maintenance, and offers flexible terms for drivers who can rent cars on a weekly basis, for up to eight weeks at a time.”
One of the reasons leasing has become so attractive is because car-sharing has become more accessible, and car companies are embracing car-sharing. The question for the future will be, what effect does that have on the resale value of automobiles purchased by individuals?