Car Subscription as an ownership model is more than a passing trend and it’s growing to become a $1.6 billion industry by 2026 according to Loopit, a company that assists the automotive industry to operate car subscription programmes using its software. Loopit currently boasts over 12,000 cars on its car subscription software after adding over 6,000 cars in 2021.
Loopit launched in 2019 with 18 consecutive months of growth both in revenue and active subscribers managed through its IT platform. The business now has cars available in all Australian states and recently partnered with New Zealand’s leading vehicle distribution and dealer group (The Giltrap Group). It is on track to enter the UK market by Q4 2021.
As the technology behind consumer-facing subscription companies and dealerships, Loopit provides services to many existing car subscription providers.
Michael Higgins, Co-Founder and Managing Director at Loopit said: “Alternative car ownership models like car subscription are exploding in popularity around the world, and the industry needs to quickly adapt to cater for the increased demand for these flexible alternatives to car ownership. We are also seeing applications for Loopit’s software in other market segments. This includes large car rental companies, rideshare vehicle providers and other mobility services who are looking to enter the subscription space.”
According to Higgins, the next big business for mobility is software, not vehicles.
“As car subscription becomes more mainstream, we expect most car dealerships and other stakeholders in the automotive industry to actively participate in the market over the next five years. We expect subscription to become a more prominent option to get behind the wheel of a car alongside traditional forms of ownership like finance and leasing.”
“The key to building a successful mobility subscription programme is delivering an exceptional customer experience. Consumers will demand the trust and confidence that comes from being aligned with an experienced technology provider. Much like Afterpay transformed the way consumers pay at the checkout with its ‘buy now, pay later’ model, we endeavour to see Loopit build upon its reputation as the trusted name for mobility billing solutions.”
Similar to Afterpay’s business model, Loopit allows organisations to offer their customers a completely new ‘subscribe to drive’ option alongside traditional sales and finance options. With Loopit’s cloud-based end-to-end software solution, existing car dealerships, car brands and other companies can integrate car subscription through a lucrative recurring revenue business model. Most of Loopit’s revenue comes from established OEMs, car dealerships and emerging car subscription providers which pay a percentage of the value of each recurring subscription placed by customers, plus a fixed fee.
Much like Afterpay transformed the way consumers pay at the checkout with its ‘buy now, pay later’ model, Loopit allows dealers and manufacturers to offer their customers a ‘subscribe to drive’ option alongside traditional sales and finance options. Car subscription services such as HelloCars have been increasing in popularity amid the COVID-19 pandemic, with consumers looking for a more flexible alternative to traditional car ownership. Over the lockdown period, Loopit saw a massive 52 per cent increase in enquiries from dealerships wanting to integrate subscriptions into their business.
The Loopit platform provides car dealerships, OEMs and emerging car subscription providers with “subscription in a box,” including the software, training and services needed to offer car subscription to customers simply and easily. With Loopit integrated onto their websites, dealer partners simply need to select cars from their stock to make available for subscription. Customers can then browse through the website, choose the car they want and subscribe online.