Lincoln presents itself as evidence that car buyers don’t want to pay additional monthly installments, or subscriptions, for features in their cars. Speaking to Automotive News, Lincoln’s outgoing president, Dianne Craig, says that wealthy buyers don’t want to be nickel-and-dimed. Instead, they want everything paid for up front, including any features they want.
Luxury Buyers Don’t Want To Pay Subscription Fees
Ford (and by extension, Lincoln) offers a monthly fee for its BlueCruise autonomous driving software, though according to Lincoln, many of its buyers would rather pay up front for the feature. While this approach may work for Ford, Craig made it clear that the average Lincoln buyer is different in a lot of ways, including their intolerance for subscriptions. Other automakers have tried and failed here too, and many of them were luxury brands. BMW is arguably the most famous example. It offered heated seats as part of a monthly subscription package, and customers didn’t take kindly to included hardware in their vehicles being paywalled. Automakers don’t want to give up this easy, recurring revenue, however. Lincoln has a clever play that will push later buyers to pay for some included features that will eventually become subscriptions later.
Lincoln Skirts Subscriptions With A Clever Strategy
While the automaker isn’t all-in on subscriptions, it does have means of extracting revenue from owners down the line, which helps to cover the gap that steady, recurring revenue could bring. “Whether it be BlueCruise, connectivity, security—they will be part of the warranty period,” Craig told Automotive News. “Our focus is really in having that in the base vehicle price, at least for the warranty duration. Everything we’ve learned about premium customers is they don’t want subscriptions.” After that, your complimentary trial of BlueCruise expires. From there on in, it’s $495 annually for the autonomous driving software.
TopSpeed’s Take
Cars are expensive for nearly everyone. Next to a home, it’s the single most expensive asset (or debt) many Americans lay claim to. It’s easy to understand wanting to pay once and be done with the whole thing, especially when you’ve got to shell out for ever-increasing insurance premiums every month as it is. Automakers love the recurring revenue that subscriptions generate, and they’ll keep testing the waters as they search for a way to make the stock price continue to rise. If consumers don’t want that, the best way to curb it is by not paying.
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