Despite subscription car services not really being a thing anymore, some private companies are still trying giving the business model a go. Their only appeal is the flexibility offered to subscribers. There’s no commitment and maintenance, and insurance are usually bundled in the payment as well, but there’s also the initial high costs associated with joining. If subscribers aren’t careful, the service can end up costing as much or more than just purchasing the car outright.
Motorenvy is a luxury car subscription service that has branches in seven states — California, Colorado, Connecticut, Florida, New Jersey, New York and Pennsylvania. The way it works is simple enough: You choose your car, submit a credit application along with your drivers license, and then, once approved, you drive off. There are three subscription tiers: return the car anytime (pretty much a rental), a six-month term or a 13-month term. There’a also a mileage limit of 833 miles/month. Or if none of this works you can simply buy the car from Motorenvy at the price it’s listed for.
While there’s a nice selection of luxury vehicles and getting started sounds simple enough, digging into the numbers shows you just how ridiculous of an expense this all can be.
Take this beautiful 2019 Lexus LC500 listed by Motorenvy. The most costly option for this Lexus is the term where you can bring it back whenever you want. First, there’s the $4,200 “startup cost” that’s really just a cap cost reduction, similar to a regular lease (which varies depending on the term: $5,400 for six months and $4,200 for 13 months.) Then there’s the one time membership fee of $1,000. Throw in the first month’s subscription price of $1,724 and you’ll be parting with $6,924 before you even drive off with the LC. That’s not including an additional $1,000 deposit just to secure the car.
If you were to finance this LC you would come out cheaper in nearly every way. Using Motorenvy’s purchase price of $72,999 and that $6,924 as a down payment, you’d pay $477 less a month than you would if you subscribed ($1,247.) That’s not including insurance because Motorenvy’s subscription doesn’t look as if it includes insurance in the price. A 20 percent down payment would make the monthly payment even cheaper at $1,102/month.
Motorenvy even had some older cars that really don’t make much sense for subscribers. Take this 2016 Mercedes SL400. Would you really part with $5,000 up front and then $1,000 a month to subscribe to an eight-year-old luxury GT? Just off the top of my head I’d estimate payments on a similar SL would be $600-$780 a month tops if it was financed. Subscriptions can work if they make sense to you and your situation, but paying this kind of money to subscribe to used luxury cars just doesn’t make sense.