Your Used Car May Soon Come With Subscription Fees

news reports often get people angry, but wow, did people get mad over an article published last summer about BMW. It described how the German automaker now sold some features of its vehicles as subscriptions, including an offering in South Korea that charged $18 for things that drivers are accustomed to coming standard, such as heated seats.

Subscription-weary consumers reacted with outrage. Spotify, Netflix, razors, coffee: All now come with monthly fees. But being asked to subscribe to heated seats seemed to point to something broken at the core of the money-for-stuff compact that is global capitalism. If a car company could give or take away access to tuchus warmers with the press of a button in faraway Germany, what did it mean to “own” anything?

BMW of North America eventually put out a statement saying it would always allow customers to buy features permanently up front with a vehicle. It also defended offering subscriptions for features such as dashcams and remote start functions to provide “flexibility.” The furor died down, as furors do. 

But in many ways, the BMW heated-seat kerfuffle was an early skirmish in a larger campaign. Almost every global automaker has offered some kind of subscription, such as Tesla’s Full Self-Driving ($15,000 up front, or $99 to $199 a month), General Motors’ crash response and roadside assistance system OnStar (between $25 and $50 a month), or Toyota’s Remote Connect, which offers remote start among other goodies ($8 a month or $80 a year).

It’s no surprise that global carmakers are jealous of the fantastical returns of big tech firms like Microsoft and Apple: Sell software, get Googley returns, or so the theory goes. General Motors alone has said it wants to wring some $25 billion in annual revenue out of subscriptions by 2030. Its internal research suggests car buyers are willing to spend an average of $85 a month, CEO Mary Barra said last year.

Automakers’ latest target in the subscriptions push—or shakedown, depending where and how comfortably you’re sitting—is used car owners. The average lifespan of passenger vehicles has steadily ticked up in recent years and now sits at around 12 years in the US, with cars cycling through two or three or four owners before they hit the scrap heap. Carmakers are working on making those owners into subscribers too.  

“It’s a massive market,” says Gary Silberg, who heads the global automotive sector at the accounting and advisory firm KPMG. He says automakers are trying to use the increasingly software-stuffed car to resolve a “silly” situation. “You spend all the money building the car, you spend all the money designing it and building factories, and yet you don’t get to talk to your customer,” Silberg says. More connected vehicles and the apps that go along with them mean that automakers can. “Connected cars have completely changed the landscape of customer interaction,” says Michael Bensel, vice president of mobility and connected services at Cariad, the Volkswagen Group’s automotive software subsidiary. He describes the company’s relationship with car buyers as shifting “from occasional contact at dealerships at times of purchase, maintenance, or repairs, to continuous direct customer contact during the entire ownership period.”