Swiss flag in Bern's old town.
Swiss flag in Bern's old town.

After mobile phones and the internet, we now have a flat rate for cars. We show you who already offers car flat rates and why you should think about such a flat rate.

What is the flat rate for the car?

A flat rate is nothing else than a monthly fixed price for the (in most cases unrestricted) use of an object or service. Most well-known in Switzerland are for example the flat rate for the Smartphone or the internet use.

Now the car industry has discovered the concept for itself: car manufacturers and subscription companies offer cars at flat rates or as car subscriptions. The idea of no longer driving the same car for years and having a mobility solution that adapts to one's own circumstances is getting much attention.

If you drive your car at a flat rate, you can at least use it almost without restrictions. The flat rate generally includes not only all costs except refuelling, but also a full all-round service from tyre changing to 24-hour breakdown assistance. In other words, little effort and work combined with a high degree of flexibility.

Abroad, especially in the USA, but also in Great Britain, Germany and Northern Europe, the car has been available at a flat rate for quite some time. In Switzerland, the first providers of the car flat rate have been active for about a year - with strong growth in demand.

From Mercedes to Volvo: the flat rate offered by car manufacturers

The concepts of leasing or buying a car could be facing hard times soon. More and more car manufacturers are offering cars at flat rates - with the promise of complete flexibility. In the US, various car manufacturers have already successfully tested their flat rate models and the market for flat rate offers is already growing steadily. One of the first flat rate offers was Book by Cadillac. The offer is currently on pause but is expected to start again in March 2019. After successful test runs in Great Britain, Scandinavian countries and Germany, the Book by Cadillac is now also available in Switzerland. With Access by BMW, Audi Select and Porsche Passport, other manufacturers are also offering the car on a subscription basis. Plans for Lexus and Jeep are in the pipeline for 2019.

Mercedes is now testing the European market with Mercedes Me Flexperience. If desired, the vehicle can be changed monthly. This offer should also be available in Switzerland in 2019.

The big disillusionment usually comes with the price, because depending on the vehicle model and brand, the flat rate varies greatly. Thus the monthly fixed prices begin at approximately USD 1000 and reach their limit with dizzying USD 4000. Many of these subscription offers are therefore located in the luxury sector. This applies also to Mercedes Me Flexperience: The prices start at approximately 1000 euro.

A cheaper alternative is Care by Volvo. This flat rate offer covers all services with the exception refuelling - but without any vehicle change. The flat rate starts at around 500.- euros per month, however at the cost of flexibility. Customers commit to Volvo for 24 months and early termination costs around 1300 euros extra.

Care by Volvo is already successful in the US and provides two further insights: Care by Volvo subscribers are young (one in two is under 35) and over 90 percent of customers were not previously Volvo drivers.

In general, brand loyalty is declining and users worldwide are no longer loyal to a car brand for their entire life.

Subscription providers prepare the flat rate for mass market use

Car manufacturers are not the only ones who discovered the flat rate: different companies offer cars of several brands on a subscription base. A pioneer here is the US start-up company Fair: Customers are given the flexibility to drive the car of their choice for as long as they want and to exchange or return it whenever they want. In Germany, Cluno pursues a similar concept. They offer a large selection of vehicle models, the entry price lies at € 259 - a month, with 6 months minimum period for the subscription.

Sixt also offers cars at a flat rate, but without insurance and costs for the provision of the vehicle.

Various companies in Switzerland are now offering cars of different brands on a subscription basis. In comparison to car manufacturers, customers are not tied to a particular brand of car and can change cars from time to time.

In the field of car subscriptions, Upto, Juicar and Carvolution currently offer cars at flat rates in Switzerland. With Upto, the flat rate starts at CHF 699 with a minimum rental period of 6 months. There are 4 vehicle categories to choose from - customers may not always be able to choose model and colour.Juicar offers the flat rate for CHF 599. Although flexibility is high with a minimum rental period of one month, there is only one model on offer: the BMW i3 electric car.

Carvolution offers the car flat rate starting at CHF 499, with a rental period of at least 3 months. You can choose from around 10 different models with a balanced range between the vehicle categories compact, combi and SUV. The Carvolution vehicle models are available here.

The flat rate: the future of the automotive industry?

Whether the flat rate will be one of the major trends in the automotive industry alongside electromobility is likely to become apparent over the next few years. According to predictions for the US market, the flat rate or car subscription is likely to have a market share of around 10 per cent by 2025 - which is enormous.

In Switzerland, your own car costs an average of around CHF 730.- per month to maintain. The offers of the subscription companies are particularly attractive, especially as they can keep up with maintenance costs of car ownership and because they offer full service.

In summary, car subscription providers from Cluno to Carvolution offer two central advantages over the flat rate offers of car manufacturers: Customers can also switch between car brands from time to time and the flat rate tariffs are much cheaper. This means that the car flat rate is not only reserved for the luxury segment.

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