From media streaming to gym memberships, subscription-based services rule consumers pocketbooks now more than ever. There are even some examples in the automotive world, like memberships to roadside assistance programs like AAA
. Again and again, automakers are trying to expand consumer subscription budgets, but consumers aren’t so eager to add on another monthly bill to their car payment.
Even wildly popular streaming services like Netflix hitting a ceiling when it comes to how much they can charge subscribers before they start losing them, so why would drivers want to tack on an extra $135 a month for navigation and other digital services like GM is proposing?
With inflation and high gas prices to boot, Americans don’t have much else to squeeze from their pocketbooks
. New cars are already expensive, and people don’t want to be nickel and dimed on something that’s already a struggle to afford. So why do some automakers continue to push subscription packages in spite of 75% of consumers saying they won’t be willing to pay for them? MORE: GM Buying Back Chevy Bolt EVs that Face Risk of Fire
Is the car industry headed towards subscription features?
GM isn’t the first brand to get poor feedback on an expensive subscription package. In 2020, thedrive.com
reported that BMW was planning to sell heated seats as a subscription-only feature. This was after consumers already balked at BMW’s decision to charge drivers $80 to use Apple CarPlay, a decision they have since reneged on. In spite of widespread disapproval from drivers, automakers don’t seem to be letting go of the idea so much as trying to repackage it. The 2022 Toyota Tundra for example will require a $32 monthly fee to keep the majority of its connected services and cloud-based navigation after a one-year trial.
The Cadillac Escalade is also requiring a $25 monthly fee for access to its Super Cruise hands-free driving system. The system itself is $2,500 upfront, and the 2021 Escalade already has a starting price of $101,000.
Competing in a crowded marketplace
It’s no wonder why auto giants are borrowing ideas from the tech sector. Tech and media companies yield billions in recurring, predictable profits each year by offering subscription services, but applying the same to cars—which already cost in the tends of thousands—seems less reliable.
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