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Fiat Chrysler to offer alternative to leasing, ownership model
Fiat Chrysler Automobiles is preparing to roll out a pair of new programs for its Jeep brand that offers an alternative to the traditional leasing or ownership model that effectively locks buyers into a single vehicle for years at a time.
Beginning in 2019, FCA will begin testing a service in which buyers of certain Jeep models — including the Toledo-built Wrangler — will receive credits they can later use to borrow other vehicles from Fiat Chrysler’s stable.
Separately, the automaker plans to launch a nationwide subscription-based service for the Jeep brand that will give drivers access to a variety of different vehicles and cover their insurance for a set monthly fee.
The two new programs represent Fiat Chrysler’s first stab at the car-sharing model that many analysts believe is likely to play a big role in the industry’s future.
“There are so many automakers that are dipping their toe in this,” said Ivan Drury, senior manager of industry analysis at Edmunds.com. “This is the next forefront into where automakers are going to make money.”
Cadillac’s $1,800-a-month Book service gives subscribers access to a wide range of models, including the top-selling XT5 crossover and the performance-oriented ATS-V, allowing up to 18 vehicle changes per year and covering all insurance and maintenance costs. Volvo’s Care program, which also covers insurance and maintenance, starts at $600 a month, but is limited to just two models and only allows changes after 12 months. BMW, Porsche, and Mercedes-Benz are also testing subscription programs.
Jeep Wranglers will be part of a new program that offers an alternative to traditional leasing or ownership.
Fiat Chrysler, which announced its initiatives late last week at an investor event in northern Italy, didn’t provide details on subscription costs, though the company did say there would be three tiers for the service “with options for insurance coverage, vehicle selection, and concierge services.”
A company spokesman said he couldn’t yet share any other details.
“There’s still a lot of variables in terms of what this program is going to be. However, looking at alternative ownership models is something the industry is doing as a whole and certainly FCA needs to be part of that conversation,” said Stephanie Brinley, a senior industry analyst with IHS Markit.
The program that would allow owners of the Wrangler and Jeeps with the Trackhawk, Trailhawk, or upcoming Deserthawk package to borrow a different vehicle looks to be a bit more novel than some of the other straight subscription models.
Fiat Chrysler said buyers of those vehicles would get “coins” with their purchase that they could put toward borrowing other, unspecified FCA products. The company also said customers could buy additional coins for ongoing access.
That, experts say, might encourage buyers to opt for the pricier but slightly less practical models by ensuring they could borrow more mainstream vehicles if they needed them. It also could help FCA make a little more money by selling more credits.
And though these types of programs are still very much in their infancy, how consumers react to them will likely set the tone for the future.
“There’s a potential for people to start consuming transportation in a very different way,” Ms. Brinley said. “If that sort of reality is going to take hold, all of these programs are part of getting there. [Car companies] cannot afford to wait until it’s already here in high demand.”
