Auto retail giant AutoNation this week rolled out AutoNation Mobility, a new-vehicle micro lease service.
Tim Martin, AutoNation’s head of mobility operations, announced the new program in a LinkedIn post.
It offers new-vehicle leases in six- or 12-month terms, allowing for 800, 1,000, or 1,200 miles of driving each month. The service is available in Southern California and South Florida, according to the AutoNation Mobility website, which features the tagline: “The future of driving is Flexible.”
The micro leases include routine maintenance, vehicle registration, a limited maintenance plan and roadside assistance through the vehicle manufacturer. Consumers are required to provide vehicle insurance. AutoNation Mobility is offering a variety of vehicle styles, makes and models.
The website features a tool allowing consumers to compare the cost of a micro lease to that of a traditional lease or loan. An example estimates that a 12-month micro lease for a 2023 Dodge Challenger would require an $820 monthly payment, with $2,400 down. That compares with a $914 monthly payment for a 36-month lease and an $864 monthly payment with a five-year loan, all with the same $2,400 upfront. The comparison also includes one-month rental costing $2,013. The payments are based on 800 miles a month and don’t include taxes and fees, according to the website.
Consumers can browse vehicles online and prequalify via a soft credit pull and see their maximum monthly payment. Vehicle pickups will happen at an AutoNation store.
At the end of the micro lease, customers can extend their lease, enter another micro lease or buy the car, according to the website.
AutoNation declined to comment on the program.
The micro leases appear similar to a car subscription, which typically combine insurance, maintenance and vehicle use into a single monthly payment. The concept has spurred initiatives and startups from several dealership groups in the U.S. in recent years. However, depreciation, insurance costs, and a lack of public awareness have emerged as significant barriers to profitability, and some services have shut down in a matter of years.
Many automakers continue to see potential in the model, though, such as Porsche Drive and Care by Volvo. Proponents cite the popularity of subscriptions in other countries, such as Germany.
Marketing for these programs emphasize convenience over long-term commitments.
Other subscription programs have centered themselves around EVs and providing the low-risk opportunity for consumers to try them out.
AutoNation ranks No. 2 on Automotive News’ most recent list of the top 150 dealership groups based in the U.S., retailing 229,971 new vehicles in 2022.