Nissan Ireland has launched a new service, called Subscribe & Drive.
Get a new car with no deposit down
The idea behind Subscribe & Drive is to move buyers away from the conventional buy-it-own-it-trade-it-in model of car ownership, and towards a subscription-based service where you pay a fixed monthly fee but never actually own the car.
With Subscribe & Drive, Nissan is courting both those customers who do not have a deposit to put up against a new car, and those with an existing car for which they want to maximise their trade-in.
'A service that meets customers' needs'
"Nissan is making it possible for Irish motorists to drive a brand new car for a price they can afford and to potentially put money back into their own pocket while doing so. It is a win-win service for motorists," said James McCarthy, CEO of Nissan Ireland.
"Our subscription service is made for anyone who wants to release the equity in their old car and to drive away with a new one, without paying a deposit, for a fixed payment that fits within their monthly household budget. Customers just need to sign up as a subscriber. They can then drive the car for an agreed term and hand it back on completion without any other obligation. It's that simple. The subscription model is changing the way we drive and own our cars and we providing customers with a service that meets their needs,"
Prices start from €356 per month
The idea is that you sign up to a 24 or 36 month contract. Prices start from €356 a month for a Micra, €543 a month for a Qashqai, or €605 a month for a Leaf electric car with the basic 40kWh battery pack. Customers can choose annual limits of up to 10,000, 20,000 or 30,000 kilometres after which a charge per kilometre will apply for excess mileage. Optional service and maintenance fees can also be incorporated into their monthly subscription fee.
However, it's a little difficult to see the benefit of this compared to a normal PCP finance deal. If you have a car to trade in, a PCP deal would likely offer you lower monthly payments (a Micra can currently be had on 0 per cent finance for €238 per month) and you would have at least partial ownership of an asset at the end of the period.
At the time of writing, Nissan had not responded to a request for more details, such as what customers do at the end of their subscription period, or if there is flexibility in the service - such as access to other vehicles in the Nissan range - to help differentiate the Subscribe & Drive from a regular PCP product. We'll update this piece when we hear back from them.
UPDATE:
A spokesperson for Nissan Ireland has confirmed what we thought about the Subscribe & Drive plan - that it's not really a subscription service at all, but really a personal contract hire purchase (PCH) with a fancy name. No other motoring costs (servicing, insurance) are covered by the monthly payment, nor is there the opportunity to change vehicles mid-plan according to your needs.
However, the spokesperson did confirm that such things are being considered, and may be offered as the Subscribe & Drive service evolves. CompleteCar was told that: "Subscribe and Drive is a product which is derived from PCP but we believe addresses some of the issues some customers have with PCP - namely deposits required and residual value exposure. The option we have launched with today is the first of a number of subscription style products which we will be offering to customers. Subscription style motoring is made for anyone who wishes to have all the benefits of driving a brand new car without requiring to tie up deposit money in the deal or be exposed to the future trade-in value of the car. It is product which is perfectly suited to a younger audience that might not have spare cash hanging around to put into a deposit - but also could be equally attractive to anyone that has a bit of equity tied up in their current car and would like to release that equity before it dissipates.
"The particular subscription product that we are launching today is a standard basic package where a customer simply pays a monthly fee for the use of a vehicle over a fixed period of time. It has the benefit of being very transparent in that the quoted monthly rate is not dependent on the size of the deposit - basically what you see advertised is what you get - PCP can become quite complex because the monthly payment is very much a function of the size of the deposit and tend to be advertised on the basis of the lowest monthly rate which obviously requires the highest deposit. Over the coming months, depending on the response we will look to launch further products which could include multi-product subscription packages, increased term options and full mobility packages to include insurance, road tax, servicing and maintenance costs."
On top of that, as with a PCP, there is an opportunity to benefit from any value in the vehicle above the guaranteed minimum future value (GMFV) at the end of the rental period. According to the spokesperson: "If the vehicle's value exceeds the GMFV the customer gets the benefit of this. If the car's worth is less than the GMFV the customer would not be liable for the difference. So the customer has no exposure with regard to residual values. If, at the end of the subscription period the vehicle's value exceeds the GMFV on the car the customer gets the benefit of this. If the car's worth is less than the GMFV at the end of the deal the customer would not be liable for any difference and can either sign up to a new deal or walk away whichever option is preferable for them."
There is also the potential for a multi-car subscription service in the future: "Nissan Subscribe and Drive product is evolving and there are likely to be multi product subscription options available in the future."