Features
8 Sep 18

Carma launches car subscription platform in U.S.

Fitting in somewhere between buying or leasing a car and renting one for a few days, Detroit-based vehicle subscription startup Carma has launched a new software platform which helps dealerships offer a convenient and flexible way to offer cars to would-be drivers.

For a fee, customers can acquire a car from a dealership or a leasing company on a monthly basis. The service includes car insurance, maintenance, and other responsibilities a car buyer would normally be concerned about. Basically, the end user is only responsible for gasoline and a few incidentals.

Ultimately the cost is more per month than a lease or ownership, but it offers much more flexibility. “Considering all the aspects of owning a car, our subscription service is about 20-25% more. However, we like to say that it is about 30 times more flexible,” says CEO Azarias Rede.

Targeting Dealerships and Leasing Companies

While there are other US-based startups such as Fair and FlexDrive which seem to be focusing more on private party consumers, Carma is a bit different, technology news portal TechCrunch reported.

For one, it offers strategic consulting aimed at helping companies develop subscription strategies specifically for their vehicle fleets. Basically, Carma is set on being a white-label backend for similar services branded and operated by local dealerships and vehicle leasing companies.

One such deal has already been made through a Canadian leasing company under the name AutoOne, the portal said.
As dealerships have huge inventories just sitting around waiting to be used, they could offer month-to-month contracts to help promote brand new models, much like a test drive, or put their used car lot into use.
Besides providing all the infrastructure for the service, Carma handles insurance, fleet tracking, user agreements and billing through a mobile app specifically designed for a dealer or a group of them.


“We install a telematic device into the car and through this, we have integrated a unique insurance policy that is tailored made for subscriptions through our partnership with commercial insurers,” Rede said on Wednesday (Sep 5) in San Francisco during the Startup Battlefiled at TechCrunch Disrupt SF 2018. 

Carma CEO at TechCrunch Distrupt SF 2018 (Source: TechCrunch) 

Overall, Carma allows the direct connection between driver and dealer to stay in place while offering the benefits of subscription to both parties. Dealers pay a monthly license fee based on the size of the fleet.

Finally, we cannot go without saying that car leasing and fleet management companies could also consider the service and offer it to their clients.

Authored by: Daniel Bland