Carma Car Subscriptions

950 N Washington St.
Alexandria,  VA 
United States
703-651-6338
http://www.carmacar.com
  • Booth: 7548W


Car Subscription Software

Carma offers car subscription software. It is the only system you need to launch and manage a car subscription program at your dealership, with mobile apps, back office, and inventory management. Are you ready to join the growing car subscription market? We are ready to work with you. Visit www.CarmaCar.com/Platform


 Press Releases

  • The way we get around is changing fast. Between ride services, on-demand car sharing and other methods to have a car only when you need it, owning one is getting less and less compelling. A new startup called Carma offers a happy medium for those who want the convenience of owning a car without the hassle of, well, owning a car. Instead, you just subscribe to it.

    Carma  launched publicly today at the Startup Battlefield at TechCrunch Disrupt SF 2018. Its system is more flexible than a lease, cheaper than hourly or daily car-share services and precision-targeted at millennials (whatever those are) and dealerships.

    It works like this: You pick from a variety of new and newish vehicles sourced from the inventory of car dealerships in the area. For a set monthly fee you basically get to treat it like your car. Insurance is included, as is ordinary maintenance — you’re mainly on the hook for gas and a few incidentals.

    Keep paying for as many months as you like, or just one, and when you don’t need the car any more, just give it back to the dealer. Boom, you’re car-free again.

    The assumption is that there’s a considerable population of people who are caught between the high-cost, low-commitment world of car and ride sharing and the variable-cost, high-commitment world of ownership. They don’t want to have a $20,000 asset sitting around doing nothing but costing money, but they also don’t want to pay through the nose every time they want to go more than a mile or two. Where’s the medium-cost, medium-commitment option? That’s where Carma intends to fit in.

    “If you’re looking for a week, or a trip, there are a lot of good options that are for fractional use, by the mile or the minute, or daily rentals,” explained founder and CEO Azarias Reda in an interview. “This is for someone who needs a car on a daily basis.”

    Young, flighty, commitment-averse millennials are the prime demographic, he noted: “Millennials are the biggest consumer of leases. They’re already driving this notion of ‘I want to access this vehicle but not necessarily own it.’ Subscriptions combine those desires.”

    Ultimately the cost is more per month than a lease or ownership, but if what the driver values is flexibility, there’s no comparison.

    More importantly, it’s a great option for dealerships. These places have all kinds of inventory sitting around that could be deployed in whatever manner they see fit: a couple for extended test drives of new models, a few older ones paying their way despite being the last four on the lot from last year, a different way to monetize overnumerous used vehicles, and so on.

    It’s not the only one — Fair and FlexDrive are startups with similar aspirations and are already on the market. And some car manufacturers offer specific, though often luxury-oriented, medium-term subscriptions. Carma, however, is taking a slightly different tack. While those services are direct to consumers, Carma aims to be a white-label backend for similar services branded and operated by local dealerships and finance outfits.

    Carma tested the consumer model but found there was friction from usurping the place of primacy for drivers from the dealers themselves. After all, your local Subaru dealer doesn’t just want to be a lot filled with cars — they want to be a known, local presence and trusted maintenance partner to their customers.

    So the deal would be that Carma provides all the infrastructure as far as handling insurance, fleet tracking, user agreements and billing, but it all takes place through an app specific to a dealer or group of them. It allows that direct connection between driver and dealer to stay in place while offering the benefits of subscription to both parties. Dealers would pay a monthly license fee based on the size of the fleet.

    Organizations that manage leases could also be the client, providing the subscription possibility to multiple dealers they work with. This is the case in one of Carma’s early deployments in Canada, where a leasing outfit with more than a billion dollars (Canadian, naturally) in lease originations has launched its own branded subscription service, AutoONE.

    Allowing the dealers to keep their pride may be a serious advantage over national or international branded services that treat them like inventory management modules. And the mobility market is large enough, of course, that several services should be able to compete alongside one another with variations in offerings and inventory.

    After all, why pay for a service with built-in insurance if your job pays for it? Alternatively, why have your own if you can get it month by month for a few bucks more? Want to switch your car every month? Want to pay less to be limited to models three years old and back? These variations will certainly all be put into play.

    Reda comes from a computer science and fleet management background at the University of Michigan, where of course some of the sharpest minds in automotive tech can be found. The company is a Techstars alum and is backed by them, Fontinalis, Kybba, Right Side Capital, and IDV — terms undisclosed for now.

    The mobility space is evolving fast, and it’s companies like these that keep that evolution rolling along.

  • Americans are used to paying for subscriptions — to magazines and cable television, for instance — but experience shows they'll cancel when the price of admission gets too high, or there are more tempting alternatives. Cord cutters ditched nearly 1.5 million pay-TV subscriptions in 2017, according to a survey by Leichtman Research Group.

    Cable TV started out cheap with basic offerings, and then got expensive. The auto industry's subscription offerings are new, but they're starting out costly, and not price-competitive with traditional leasing. The upside is that they take the hassle out of car ownership for busy people by letting the service take care of maintenance, insurance, licensing and taxes. And they give consumers choice, often allowing relatively painless switches between different cars in the automakers' lineup.

    Subscription services also point the way toward an ownership-free auto experience, and offer an easy transition to a potential world where ride- and car-sharing will be dominant. Subscriptions are here to stay, but consumers may take a while to "get" them. Lincoln's subscription service for lightly used 2015 to 2017 models, offered through the Ford-owned Canvas beginning this year, got off to a slow start. Many early subscribers canceled.

    Last month, Cadillac announced it would "temporarily pause" its $1,800-per-month Book subscription service for "adjustments" as of December 1. According to the Wall Street Journal, "Snags with the back-end technology used to support the service made some customer-service functions tedious and time-consuming, adding costs for the company."

    The challenge for automakers is to come up with a strategy that offers consumers a compelling, affordable option to regular ownership, and one that can also make a profit. I think they'll find that sweet spot, but they're not there yet.

    Jack Nerad, former executive editorial director at Kelley Blue Book and author of "The Complete Idiot's Guide to Buying or Leasing a Car," points out that "A lot of people expected that subscriptions would be very valuable for people who wanted inexpensive transportation, but the reality is quite the opposite. Subscriptions are offering more choices for the wealthy. And, faced with a $1,500 monthly payment, those consumers might just choose to go out and buy the car they really want."

    Some basic mechanics: The services vary, with some charging a flat fee for access to a specific group of cars, and others setting different monthly rates for different models. Many of the services are tiered, with entry-level cars on the bottom, premium and luxury on the top. Mileage restrictions are common, but fairly generous. Care by Volvo allows $1,000 worth of damage to the car or excess miles without penalty. Many of the programs are offered in only a few cities.

    Price resistance has led some automakers to lower their tariffs. BMW's Access charged a whopping $3,700 for its top M tier, but now that's down to $2,699. And a base $1,099 tier has been added.

    Some more sample pricing:

    Care by Volvo: $600 a month for the XC40, $775 for the S60, no down payment.

    Mercedes-Benz Collection: Car changes with minimal notice; lower Reserve tier, $1,595 per month; Premier tier, $2,995; The application fee is $495.

    According to Ivan Drury, a senior analyst at Edmunds, "The sticker shock is kind of impressive." He pointed out that under BMW's original plan, a consumer would be paying $3,700 monthly to drive an X6 M. "The traditional lease on the same car was half that," Drury said. "For that price, a customer could lease both an M6 coupe and the X6 M and have them both on hand."

    Independent offerings include FlexdriveLessBorrowFair and Carma. The offerings vary, of course, but a big benefit is their fleets include cars from more than one manufacturer. Want to try a Tesla? Borrow one from Borrow, which is electric-only. But only Los Angeles residents can apply.

    Drury pointed out that third-party services give consumers "lots of wiggle room" on vehicle choice, and most likely a minivanif that's what a family actually needs. The third parties are also usually cheaper than the auto companies.

    Want another parallel? The record companies tried to offer online music before iTunes, but not only overpriced their services, but some made them blatantly self-serving, with files that disappeared when customers unsubscribed. Apple's $1 for a song you'd own forever was instantly appealing.

    The stumbles at the opening gate may be short-lived. It is really in automakers' interests to build subscription services that work, both for them and the people who want to access transportation, not own it.

    There's no doubt that the subscription model works. It's potentially quite disruptive. But the full impact won't arrive until Americans are offered a deal they can't refuse.

 Additional Info

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