Buckle Up – Subscriptions Are Coming For Your Car’s Best Features

I’m going to go out on a limb here and guess that you’re a subscriber.

Hopefully to Forbes but also to a few of the countless industries where it’s now common – music on Spotify, streaming services like Netflix

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or Disney+, shaving razors, dinner meal prep, fitness classes, the list is endless. 

Subscriptions to these services is now no big deal, right? 

So thought Toyota, until the automaker found itself on the naughty list in December. That’s when news broke that the automaker was charging some customers a monthly subscription to use their key fob’s remote start feature – something pretty much everyone assumed was something we didn’t need to pay a monthly fee to use. 

But if you think Toyota’s practice is a one-off move in the auto industry, buckle up.

This is just the tip of a very large iceberg poised to quickly sweep the auto industry. Not just for extra features on a car’s navigation system or trick rear-wheel-steering on luxury models, but even for the more mundane features we now take for granted.

Toyota caught the world’s ire for two reasons. For one, this is a subscription of a relatively benign (and cheap) feature that many people expect to be standard throughout their ownership of the car. 

This stands in contrast to say, Tesla

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, which offers versions of its Autopilot hands-free driving system as a monthly subscription rather than paying the full cost upfront (the poorly-named Full Self Driving package is a $10,000 option). That’s a pricey add-on that is reasonable to assume you’ll need to pay for in some way – either upfront or over your ownership of the car.

Second, Toyota caught the world’s attention because it was among the first brands to roll out a subscription for a minor service. Because the practice is still in its infancy, it feels like a bit of a shock to our understanding of how we pay for features on a car. 

But this idea of charging for features – big or small – is going to become common, and soon.

The reason automakers are doing this is very simple: money. 

Now that over-the-air updates are becoming commonplace on today’s ever-connected cars, subscription-based features are just too shiny a revenue stream for brands to ignore. 

For example, Stellantis and GM have predicted they’ll rake in $23 billion and $25 billion, per year, respectively, in revenue by 2030 from subscription and software services. That’s huge money at a time when automakers are facing massive R&D costs owing to the rapid transition to all-electric vehicles. 

Facing these looming bills over the next decade, automakers now reason that they’re leaving money on the table in charging a consumer once for a feature that they can charge for many times over. 

Plus, the subscription model means revenue keeps rolling in on a vehicle even after it’s passed to subsequent owners; a car on the road for 20 years now means 20 years of revenue for a feature that was once paid for by just the initial buyer. 

What’s more, consumers today are used to subscribing to a wide variety of services in their everyday lives. So automakers reason that yet another monthly fee isn’t a wholesale shock to our spending habits. 

But there may be a limit to shoppers’ patience. 

There’s a difference between opting into an online music streaming service like Spotify and being forced to pay for a feature on your car that for a long time was free or one that seems minor enough to be included gratis. 

BMW learned this the hard way in 2018 after it charged an annual $80 fee for access to its vehicles’ Apple

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CarPlay connectivity – a feature that is now standard on many new vehicles today, some of which cost tens of thousands of dollars less than BMWs. 

The automaker quickly reversed course in late 2019 after getting huge blowback from consumers and in the press about the move. 

And after Toyota’s kerfluffle blew up, the automaker made it clear that older models of its cars would no longer need a subscription to use its remote-start feature; now just vehicles built after Nov. 12, 2018 require the fees.  

But shoppers even frown on subscriptions for larger-ticket features like ADAS or hands-free driving systems, choosing to pay a one-time fee upfront, even if that cost is in the thousands of dollars.

Autolist.com surveyed car shoppers on whether they’d prefer to pay for a feature upfront or via subscription; 44 percent said they’d rather pay up front than subscribe, just 18 percent said they’d prefer the subscription model. That’s despite the fact that the upfront fees may well spill into the thousands of dollars for these hands-free systems. 

So what can you do as a buyer of a new car? Well, read the fine print, as hard as it may be. Press your salesperson on whether any of the vehicle’s features you have access to now will need a subscription to keep working after a certain period of time – and get the answer in writing. 

This is especially true for connectivity features today (navigation systems, real-time traffic alerts, ADAS features not required by law or hands-free driving systems,) even if you paid an extra upfront option cost for those features. 

But as the Toyota case shows, it will also be increasingly common to pay subscription fees for even the more mundane features we assume will be free. Don’t blame Toyota, blame technology.