How to Build Your Online Car Subscription Platform?

Subscription-based car leasing is one of the most flexible car ownership methods available today. It provides many benefits to both individual consumers and corporate fleets in terms of cost, loan, down payment, and more. With rapid urbanization and a change in employment preferences, you can expect the car leasing sector to grow rapidly. Employees can subscribe to used cars and end the subscription while moving to a new city, or also lease a newly manufactured car directly from an automobile manufacturer.

While the car leasing options are many, they all have one thing in common, a robust online channel enabling direct transactions, better cataloging, more digital marketing opportunities, and a seamless leasing experience. In the digitally competitive age, it is essential to have an online platform for any business. Car leasing companies are not exempt. As per Statista, 75% of total revenue will be generated through online channels in the car rental industry by 2029, making it more essential to have an online platform

However, launching a car subscription platform is not easy. You either need to develop the platform from scratch or invest in a reliable automobile leasing software. In this blog, we have considered all the critical aspects of developing a car subscribe & lease platform, including market trends, business model, key features, technology and more.

Market Trends and Opportunities

The following trends and dynamics are characterizing the car leasing sector. By analyzing them, you can figure out the type of car leasing platform you want to launch and for which audience.

• The global car leasing industry is worth $123.16 billion and is growing at a CAGR of 6.8% in the projection period 2025-2037. 
• Both used cars and newly manufactured cars are in high demand in the car leasing market
• Corporate businesses are opting for subscription-based leasing models to empower their short-term employee car ownership programs
• The hospitality sector uses leased cars to offer superior services to their guests and customers
• Consumers with relocating jobs are more likely to invest in a leased car 
• The demand for EVs is increasing on car lease platforms. As per the statistics, rental remains the primary ownership method for EVs.
• Car leasing companies are relying on IoT-enabled devices to track the performance and usage of leased vehicles and the fleet
• Car manufacturers in many countries have launched their own car subscription platforms. To compete with such players, many broker platforms have also emerged
• The North American region is expected to dominate the market by controlling almost 30% of the market share by 2037.
• The leasing model has also proven feasible for other types of automobiles, including buses, trailers, and recreational vehicles.
• The car leasing model is promoting the Mobility as a Service (MaaS) model worldwide.
• With car leasing, ownership of expensive and advanced technology vehicles becomes affordable for general consumers.

Benefits of Car Leasing

Car leasing offers numerous benefits to both individual consumers and large businesses. Due to these benefits, the car leasing model is highly relevant for the near future.

• No Loan Required: To subscribe to a rental vehicle, consumers aren’t required to take a car loan, which incurs additional interest and surges the actual cost of the car.
• Low Upfront Cost: As no loan is required, no down payment is involved. This decreases the overall upfront cost for consumers.
• Flexible Ownership: Car leasing is highly flexible for the working class with relocating offices and worksites. Thus, they can use the vehicle and return or exchange it at any time. 
• The Buyback Option: In case customers want to purchase the vehicle during or at the end of their lease, they also get a buyback option. Car manufacturers only ask for the remaining price of the car and customers get to own the vehicle. No interest rate is involved.
• Does Not Count As a Debt: While car loans count as a debt and impact the credit score, owning them with the leasing model does not count as a debt nor affect the credit score.
• No Burden of Maintenance and Servicing: The car leasing company takes care of service and maintenance. Consumers can sit back and relax. In case of any issues with the car, getting the car exchanged is also easy.
• Useful for City Driving: With the leasing company handling the servicing and maintenance, subscribed cars are highly suited for city usage and driving in high-traffic areas.
• Higher Value for Money: Even without the buyback option, car subscriptions provide high value for money. As customers only lease the car, they don’t bear any depreciation costs. They get high value for the amount they invest.
• Hassle-Free Paperwork: Buying a new car and getting a car loan, both involve heavy paperwork. Consumers also need to submit various documents for verification. In car leasing, only minimum paperwork is involved. 
• Helpful for Maintaining a Corporate Fleet: Corporate fleets are expensive to maintain and manage. The car leasing models provide corporate companies with an effective and affordable option to manage a large corporate fleet without heavy upfront investment and maintenance costs.

Top Car Leasing Platforms Around the Globe

To take inspiration and reference to build your car leasing platform, you can check out the already existing platforms available in the market. Some of these are launched by car manufacturers while others are launched and managed by non-manufacturers or intermediaries.

Launched by Manufacturers:

• Mercedes Benz
• Volkswagen 
• Renault Mobility
• Toyota
• Hyundai
• Maruti Suzuki Subscribe

Launched by Non-Manufacturers:

• FINN
• Sixt
• Bipi
• Invygo
• Revv

Business Model of a Subscription-Based Car Leasing Platform

A car leasing website is different from regular car rental platforms where customers select a used car for their one-time requirements and input rental dates through a booking calendar. Instead, the selection process on a car leasing website is more difficult. Customers need to make a selection for their long-term requirements and certain features, such as the booking calendar and rental security submission, aren’t entirely present.

Due to these differences, it is important to understand the business model workflow of a car leasing platform so that you effectively adapt that on your platform. As per your business preferences, you can also plan any necessary changes in the workflow. 

Step 1: Customers visit your car subscription platform and select a car

Step 2: They review all lease plans and select a plan for 12,24,32 and 48 months.

Step 3: To finalize the lease, customers submit minimal documentation

Step 4: Customers select an insurance plan for their leased cars

Step 5: The car leasing company drops off the car to the customer’s drop-off location

Step 6: Customers do a Pre-Delivery Inspection (PDI) to ensure there are no issues or flaws in the car

Step 7: Customers use the car for the specified leasing period and visit timely for servicing

Step 8: They return or buy back the car at the end of the lease

Revenue Generation Model

Online car lease platforms can have multiple revenue generation channels. These channels add stability to the business and ensure you reach a breakeven point faster. Some revenue generation channels that you can add to your car subscription platform are:

• Multiple Subscription Charges

Keep tiered subscription packages on the platform. These packages can include quarterly, half-yearly, or yearly leases. Each subscription can also have varying benefits, such as car accessories, premium on-road assistance, child seats, dashcams, and more.

• Sell Car Accessories

On your car subscription and lease platform, you can sell various types of car accessories, including the ones mentioned above and many more such as GPS trackers, tires, alloys, snow chains, neck pillows, car covers, rubbing compound, polish, car shampoo, decorative items and more. In this case, you will need to invest in a car subscription software that comes with both rental and sales functionalities. 

• Sell Insurance

It is not permitted to drive an uninsured car on roads in many countries, but this rule only requires drivers to maintain third-party insurance. You can still sell own-damage insurance with higher coverage and other benefits on the marketplace. 

• Garage Partnerships

Car leasing companies can partner with local garages and charge them for being an authorized dealer. This way, you can ensure garages with a higher flow of vehicles while earning revenue through service commission. 

Key Features Required on Your Car Subscription Platform

To ensure smooth operations on the marketplace, be it cataloging, fleet management, sales, invoicing, upselling and more, you need a certain set of features on your platform. You can either get these features custom-developed or look for them in a readymade auto leasing software.

• Custom Subscription Packages: Get the option to create custom subscription packages and display them all across all car listings.
• Rental security collection: Option to collect a rental security deposit in case your business model requires you to collect one.
• Rental Agreement Management: For levying the terms and conditions of the lease, a rental agreement management option along with eSign is important.
• Fleet management: Comprehensive fleet management system that includes vehicle details, rentee details, rentee address, and tracks overdue returns and payments.
• Maintenance buffer period: After the return of every vehicle, you need to inspect it for any damages or maintenance needs. During this period, the vehicle cannot be added back to the online fleet. Maintenance buffer period will help you sync the under maintenance fleet with the online fleet.
• Recurring payment system: The recurring payment option is required to collect monthly subscription charges.
• Document verification:  For verifying essential documents, such as driving license and customer address, you can use an in-built document verification module.
• Internal messaging system: To simplify communications, you can integrate an internal messaging system within the platform that will help you ensure privacy and security as well.
• Request for Quote: The request for quote option is required to attract big budget corporate clients who often look for a custom quotation for their requirements.
• Rental Add-ons: For upselling products, such as car insurance and child seats, you can use a rental add-ons option.
• Rent plus Sell: The rent plus sell option will help you lease vehicles and sell accessories on the same platform.

Ways to Develop a Car Rental Subscription Marketplace

As said above, there are two approaches to develop a car subscription marketplace, which are custom development and using a readymade software. Let’s discuss these approaches one by one.

1. Custom Development 

The custom development approach requires you to develop the car lease platform from scratch. You will first need to hire a business analyst who will prepare the workflows and feature list, and then a development team to prepare the source code. Additionally, you will need to choose the technology on which you want the platform to be developed. Because of all these efforts, the development timeframe under this approach is very long. Hourly development rates also mean that the project is very likely to result in overhead costs.

Pros of Custom Development

• You get the choice of tech stack
• Endless customization capabilities
• Full source code ownership

Cons of Custom Development

• Very costly because of hourly development rates
• Highly time-consuming
• The end product is not tired and tested
• Not suitable for entrepreneurs with a limited budget

2. Using a Readymade Software

There are two types of readymade car rental and leasing software, which are SaaS software and self-hosted software.

1. SaaS Software

The term SaaS refers to Software as a Service and implies that the software is provided to the business as a monthly recurring service. It is originally installed on the software provider’s servers and the car subscription marketplace can only access it over the cloud as long as it pays continuous subscription charges. This makes using SaaS software very expensive for long-term operations. Additionally, as the number of listings and transactions is limited in a SaaS software, you may need to upgrade your subscription package in order to scale and grow

Pros of Using a SaaS Car Leasing Software

• Quick to deploy
• Tried and tested software
• Requires very little upfront investment

Cons of Using a SaaS Car Leasing Software

• Very costly in the long run because of never-ending costs
• May lack advanced features
• Some SaaS software charge an additional transaction cost
• A limited number of listings, transactions, and user profiles

2. Self-Hosted Software

A self-hosted auto leasing software is hosted on the car leasing company’s own choice of servers and provides them with more control. Due to this, there are also no restrictions on the number of listings, transactions, and user profiles in self-hosted software. Furthermore, self-hosted software is available at a one-time cost and comes with a lifetime usage license. As there are no monthly subscriptions involved, you get all the essential and advanced features right from the beginning and can easily offer a best-in-class rental experience.

Pros of Using a Self-Hosted Car Leasing Software

• Available at a one-time cost 
• Highly cost-effective in the long run
• Tried and tested for market operations
• Fully customizable to meet additional requirements
• Unlimited listings and transactions
• Full source code ownership

Cons of Using a Self-Hosted Car Leasing Software

• The choice of tech stack is not available
• Includes an upfront cost 

How Yo!Rent Helps?

Yo!Rent is a self-hosted car rental and car subscription software that helps founders launch feature-loaded rental marketplaces that streamline bookings, subscriptions, and day-to-day rental operations. To simplify subscriptions, Yo!Rent comes with separate vendor and renter dashboards, which help in providing an unmatched rental experience. With its user-intuitive design and industry-specific layout, Yo!Rent helps in developing highly professional rental websites. Because of its extensive feature set and elegant front-end design and dashboard, Yo!Rent is suitable for both car manufacturers and third-party car leasing companies.

Key Reasons to Develop Your Car Subscription Platform with Yo!Rent

• Fully customizable rental software that can be used as a base for car subscription business
• An extensive feature set to enable smooth and streamlined rental operations
• Multiple payment options along with rental subscription
• Multi-lingual and multi-currency support to help you target a diverse audience and expand to new regions
• Unlimited listings, transactions, and user profiles

Conclusion

With the various benefits of car leasing and increasing preference for digital services, car leasing platforms are further expected to grow. Even renowned car manufacturers all across the globe are developing their own case leasing platforms and providing new cars on impressive lease terms. To enter the competition, you will need to launch your own car subscription platform and invest in a fleet of cars. To keep the business asset-light, you can launch a multi-vendor rental marketplace where different vendors will list their car for subscription while you generate revenue via monthly commissions. For any type of car subscription platform, you can use Yo!Rent as your base software.

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