Will You Rent Options & Upgrades On Your Next Car?

January 21, 2014

Computers have become integral parts of our everyday lives. Whether they're sitting on our desks, in our pockets, or on our wrists, we've become increasingly dependent on these devices to keep us connected and informed. (Heck, you're reading this article on a computer right now, aren't you?)

Computers have also become integral to our cars. They keep us moving forward and entertain drivers and passengers alike as we zip down the road.

Admittedly, the computerization of the auto space has had a few downsides. For starters, it's made life much more difficult for shade-tree mechanics. Working on most modern vehicles without some sort of diagnostic system is daunting. In some cases, it's nearly impossible.

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Then, too, although we've not reached the point at which all our cars are linked to the internet and interconnected, that day is coming -- and with it comes the real threat of hacking. (Not like the faux hacking scares we've heard about for the past couple of years.)

But the upsides of computerization generally outweigh the bad stuff. For example, we're now able to update our cars over the air, just like we update our laptops, tablets, and smartphones. That doesn't just mean that we can get safety updates, it also means that, down the line, we'll be able to access new features in our automobiles.

Consider this: at the 2014 Detroit Auto Show, MINI's head honcho, Peter Schwarzenbauer, told Autocar that he'd like to turn vehicle features on and off, according to the owner's preferences. By way of example, he cited heater elements in the MINI's seats. In the future, those might be pre-installed on all MINI vehicles, but they would only activate when the car's owner bought the upgrade. If the car were sold to someone else, the new owner could continue to pay for the upgrade, or she could downgrade, if she so chose.

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Setting aside for a moment the question of hardware installation -- which seems like it could lead to higher prices for all consumers, whether or not they want some of these upgrades -- this would likely offer consumers a lot more choice when shopping for new cars. Instead of having to buy a particular trim package to get the one creature-comfort you want, you might be able to purchase it a la carte.

True, automakers earn a lot of dough from such packages, so at first glance, there might not be much financial incentive for them to shift paradigms. But what if they moved from a one-time fee to a subscription model? For example, what if you were able to activate the heated seats in your MINI via a monthly or annual subscription? The fee would probably be fairly small, which would be attractive to consumers, but it could yield far more revenue over time, which would also be attractive to automakers.

This isn't unprecedented, of course. Safety systems like OnStar and entertainment features like SiriusXM already work on a subscription model, and if users stop paying, they lose the benefit. There's no reason to think that a similar paradigm couldn't be more broadly applied to automobiles in the not-to-distant future. Stay tuned.


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