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Dealerships’ Latest Option For Drivers: Auto Subscriptions

A joint venture from Cox Automotive and Holman Enterprises are promoting a shared mobility as an alternative to buying or leasing a car with the creation of Flexdrive.

The tandem rise of connected cars and the concept of shared mobility has will usher in new demands for auto dealerships as the purchasing models consumers have to choose from goes through a significant transition.

Instead of deciding whether to buy or lease, the option of “subscribing” to a vehicle could bring in consumers who have in recent years gravitated toward car rental services such as ZipCar.

To get ahead of the curve of shared mobility, Cox Automotive, the publisher of Autotrader and Kelley Blue Book, has struck a joint venture with dealership group Holman Enterprises to develop Flexdrive as a “a new mobility company that enables consumers to subscribe to a vehicle, rather than buying or leasing it.”

Auto Shopping Becomes More Flexible

Here’s how it works: subscribers select a vehicle and schedule pick-up/drop-off within the Flexdrive app (it’s available on both iOS and Android).

There are two payment options and no down payment or credit check required. Consumers can choose when to stop or even suspend the subscription service.

The weekly or monthly payment covers traditional automotive cost of ownership items like maintenance, roadside assistance, and insurance. In that sense, Flexdrive promises to solve the pain points of vehicle purchasing, vehicle ownership and vehicle disposal, something that is intended to appeal to Millennials.

Flexdrive was initially created within Cox Automotive three years ago. The joint venture with Holman Enterprises is meant to expand the idea and make it actionable for auto dealers.

In addition to using tech and adopting the on-demand/shared economy to match consumers’ buying expectations, dealers also are provided with a new way to get older vehicles off their lots.

“Both Holman Enterprises and Cox Automotive share an appreciation for what it means to move forward and create what consumers want today instead of fitting yesterday’s solutions into today’s demand,” said David Liniado, vice president of consumer mobility at Cox Automotive. “Through this partnership, we are combining the best of both companies to give consumers a new way to satisfy their mobility needs while enabling dealers to get into the mobility market.”

Aside from broadening the role of dealerships from being showrooms into being a connection point for online-to-offline transactions, the Flexdrive concept also suggests that dealer services will have to undergo a change in focus.

Holman Enterprises already serves as an example of that change. The company started nearly a century ago as single Ford dealership in Maple Shade, New Jersey and is now “a global automotive conglomerate” consisting of both consumer and business related services, including 38 franchise stores across the country, a global corporate fleet management company, truck upfitting, parts distribution, consumer finance and insurance businesses.

“The modern marketplace is asking for mobility solutions, not just transportation, and we are enthusiastic about working together with Cox Automotive to meet the modern consumer’s needs,” said Brian Bates, president and CEO of Holman Consumer Services. “At Holman, we have always been committed to providing customers with extraordinary service, and giving our customers the opportunity to ‘flex’ in addition to purchasing or leasing is another way we are achieving that goal.”

As a joint venture, Flexdrive will be led by Jose Puente, who has assumed the role of president.

“With Flexdrive, we are rewriting the rules of car ownership,” said Puente. “It is the new way to car, and fueled by the joint support of Cox Automotive and Holman Enterprises, we’ll be bringing this unique offering to more markets throughout the year.”

The first Holman franchise to offer consumers the ability to “flex” is Flexdrive of Cherry Hill, located in Southern New Jersey.

Auto Dealerships 2.0

Expect to see more alliances and combinations like the one between Cox Automotive and Holman. The deal comes a few weeks after Audi bought Silvercar, an airport-focused rental car company, as part of its wider efforts to influence the future of transportation by tapping into the  shared mobility.

While change is always unsettling, dealership operators we’ve spoken to about the influence of on-demand, connected cars, and other technological and social advances remain sanguine about the likely impact.

The expectation about emerging tech on auto dealers from Galpin Motors’ Beau Boeckmann, who talked to GeoMarketing about these issues last fall,  is that it likely means more drivers and not a cannibalization of “shared” auto consumers versus traditional buyers.

“I think there’s always going to be people that will love their cars, and love the automobile. It’s funny, it’s like some doomsayers are arguing, “The better it gets, then people won’t want cars anymore.” I just don’t understand that; it’s like the better it gets, the more people will want it. It’s going to be able to solve, so many issues that we have today. I’m really excited about where things are going.”