Automotive retail investor and entrepreneur Scott Painter, founder of Fair.com, TrueCar and CarsDirect, has launched his latest venture, NextCar (NXCR), a Car-as-a-Service vehicle subscription platform.

Vehicle subscription allows consumers to pay a monthly usage fee for a flexible term that eliminates the long-term commitment of a traditional loan or lease. Subscription services bundle insurance, maintenance and other vehicle operating costs into a single monthly payment.

“Vehicle subscription is an antidote to the affordability concerns and economic uncertainty faced by today’s car shopper. It was an attractive value proposition for consumers before the pandemic, as evidenced by over 3.5 million downloads of the Fair app within its first twenty-four months, and it is even more compelling today,” said Mr Painter.

“Mobility needs haven’t changed drastically since the pandemic, what has changed is the immediate need for a fully digital, low commitment and affordable mobility option that can be completed entirely on a mobile device,” said Mr Painter. “Vehicle subscription satisfies all of these needs and NextCar is committed to bringing to market a platform for vehicle subscription that enables it to thrive.”

In their report, The New Realities of Premium Mobility, Mckinsey forecast that 20 percent of the automotive retail market by 2025 will comprise car sharing, made up of either subscriptions or autonomous taxis. According to a January 2020 Capgemini report, 50 percent of consumers surveyed prefer a subscription model for the new category of Battery Electric Vehicles (BEV) over traditional vehicle ownership.

In the U.S there are 18 models and 9 brands currently selling BEVs. BEV manufacturers, including Fisker and Canoo have already indicated that subscription will be either the only or primary billing model.

“Seven million Americans are behind on their car payments, and that’s prior to the pandemic,” said Mr Painter. “Subscription takes the burden of debt off the shoulders of people seeking affordable mobility options coupled with flexibility. The market opportunity is clear, it’s appealing for consumers, automakers and retailers.”