• Studies

Survey: Consumers Hit the Brakes on Subscription-Based Features

By Analytics Team | February 27, 2023

Survey Highlights:

  • 69 percent of car shoppers said they would not subscribe to features rather than paying upfront for them

  • Younger shoppers (Gen Z) were the most open to the idea of subscribing, more than Millennials, Gen X, or Baby Boomers; the older the respondent, the more likely it was they would not subscribe to a feature

  • Higher-income households were less likely to opt for subscription-based features than lower-income households

  • When split for type of feature people would most likely consider subscribing to, in-vehicle entertainment was the most popular, while hardware-related features like heated seats were the type of feature people were least willing to subscribe to

Full Story:

Automakers across the industry are eyeing billions of dollars in revenue in the near future from subscription-based features in cars. But their plans still face a significant speed bump that’s worth paying attention to: consumers hate the idea.

That’s according to the latest survey by Autolist.com, which found that 69 percent of car shoppers said they would not subscribe to features in a vehicle in general; just seven percent of consumers supported the idea.

2023 Subscription Survey Pie chart Main Q3

Higher-earning households in the survey — those more likely to buy more profitable high-end trims or luxury models — were also more likely to reject the subscription approach.

But Autolist’s survey also found that time may be on the side of companies like BMW, Volvo, Stellantis, and General Motors, which have already begun pushing into this payment approach.

Gen Z shoppers in the survey were more likely to be open to the idea of subscribing to features than Millennials, Gen X, or Baby Boomers; Autolist found that the younger the respondent, the more likely it was that they would consider subscribing.

Consumers also indicated they’d be more willing to subscribe to certain types of features (in-vehicle entertainment) than others (heated seats).

“Brands that are hoping for a big revenue stream from a subscription model should note that it’s going to take time — and convincing — to get consumers on board,” said Corey Lydstone, president and CEO of Autolist, a CarGurus company. “Rushing into this approach too fast risks alienating a wide swath of car shoppers, particularly those that bring in the biggest profits.”

Overall Sentiment:

Autolist’s survey polled 1,200 current car shoppers in February 2023 to gauge their attitudes towards subscribing to features and services versus paying for them upfront when buying the vehicle for the first time.

Overall, resistance to the idea was widespread.

69 percent of respondents said they would not subscribe to features or services instead of paying for them once; seven percent said they were in favor of the subscription model, 12 percent said they weren’t for it or against it, and 12 percent were unsure.

Ok Boomer:

Autolist’s survey then split those responses by age group — Gen Z, Millennials, Gen X, and Baby Boomers — to see if consumers’ age affected their answers.

It turns out it did.

As mentioned, Gen Z shoppers were more open to the idea of subscribing than all other age groups:

Subscription intent by Age group

“This makes sense to us,” said Lydstone. “Younger shoppers have grown up in an age where you subscribe to everything: music, gaming, entertainment, clothes and shoes, meals, etc. So the concept of paying a monthly fee for a feature on a car is a lot less foreign to them than it is to a Baby Boomer.”

Younger shoppers’ openness here could also affect the vehicles on which automakers choose to offer subscription-based features. Cheaper, entry-level models make more sense than more expensive and premium models and trims.

“New-car affordability is always a concern for younger buyers so offering features on a monthly or yearly basis could be a chance for carmakers to keep down the upfront price of a car,” Lydstone said. “As the owner’s income goes up while they own the car, they could then start paying for more features.”

Focusing on lower-cost vehicles for subscription-based amenities may be important for another reason: high-income shoppers are more likely to reject them.

Household Income Matters:

Autolist’s survey found that the higher the household income of the respondent, the more likely they were to say they were against subscribing to features versus paying for them up front.

For example, 57 percent of people in households making under $30,000 a year said they wouldn’t be willing to subscribe to features, while 10 percent said they would.

Of households making more than $150,000 a year, in contrast, 83 percent said they wouldn’t be willing to subscribe, while 6 percent said they would.

Subscription intent by HHI

The Type of Feature & Service Matters:

But not all subscription-based features and amenities are created equal, Autolist’s survey discovered. When features were broken out into five distinct categories, there was some discrepancy in what people were willing to subscribe to and what they’d prefer to pay for upfront.

Those categories were:

  • Software and data features: Real-time traffic updates, over-the-air updates, vehicle maintenance reports, etc

  • In-vehicle entertainment: Streaming audio and video services, WiFi connectivity, gaming, etc

  • Hardware-linked features: Heated seats, heated steering wheel, adaptive headlights, etc

  • Additional performance capabilities: Extra horsepower, quicker 0-60 acceleration abilities, adaptive suspension capabilities, etc

  • Semi-autonomous or fully autonomous hands-free driving capabilities

Respondents were asked for each category whether they would prefer to pay once upfront, subscribe monthly, subscribe yearly, or unsure.

Feature payment preferences

Hardware features ranked as the category with the most respondents (70 percent) preferring to pay upfront rather than subscribing.

Performance capabilities were a close second, with 69 percent of shoppers saying they’d prefer to pay for these upfront.

In-vehicle entertainment, meanwhile, ranked as the category with the fewest respondents (44 percent) preferring to pay upfront. This category also had the highest percentage of people saying they’d subscribe monthly, at 23 percent.

“Here again we see the impact of subscriptions in other industries,” said Lydstone. “Consumers are familiar with the idea of paying a monthly fee for streaming audio and video, so bringing that into the car on a monthly basis makes sense to them.”

“At the same time, people are loathe to pay more for something they expect to be included, so hardwired features like heated seats and anything tied to a vehicle’s performance are still viewed as inextricably linked to the actual car,” he added.