Car shares may double as an extended test drive
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Tess Vigeland: How do you decide what car to buy? A test drive right? Well, if a string of deals from car makers is any hint, car-sharing may be the new test drive. Daimler owns a car-sharing company to push its Smart cars, Ford is supplying the ZipCar for university programs and GM just last week signed a deal with a tiny San Francisco company to make it easier for people to rent out their own GM cars by the hour.
Alex Goldmark reports.
Alex Goldmark: Fay Wang of San Francisco just couldn’t bring herself to sell her old car.
Fay Wang: It’s actually the first car that I bought with my own money, so I have a personal attachment to it.
A spic-and-span Saab convertible.
Wang: It’s silver. It’s a fun car, it has turbo charge.
So she rents it out for $6 an hour to her neighbors through a website. They can reserve the car ahead of time, and unlock it with a membership card. She gets about 60 hours of rentals each month.
Wang:: It basically pays for itself. It pays for the maintenance and pays for the insurance and everything.
The average car sits idle 95 percent of the time. That’s a lot of rental opportunity. You might think it would terrify auto makers to see five neighbors sharing Wang’s convertible instead of buying their own car. That’s not how Bob Tiderington of GM sees it. To him, car-sharing is a hassle-free test drive. And he wants to get people driving Chevy Cruzes, instead of that turbo-charged Saab.
Bob Tiderington: It’s just the way society is and is becoming more so as we go forward. And so the way we look at it is, we could chose to stand on the sideline and watch, or we could choose to make it into a favorable business model for us.
GM just inked a deal with peer-to-peer rental company RelayRides to make it easier to rent out personal cars using GM’s OnStar technology. The car maker is banking on the idea that car sharers will grow up and become car owners.
Susan Shaheen is a professor at U.C. Berkeley. She says it’s too soon to know for sure, but her research suggests car-sharing does build brand loyalty.
Susan Shaheen: When people leave a car-sharing program, it is not surprising to see that they actually do purchase a brand of vehicle that was in the car-sharing fleet that they regularly used.
This matters most for younger buyers according to Carroll Lachnit of Edmunds.com.
Carroll Lachnit: They represent about 40 percent of car buyers and they drive a lot less than the generations that preceded them.
And while younger drivers are sharing more, they can do one better than a 15-minute test drive with a nattering car salesman in the passenger seat. With car-sharing, they can actually try a vehicle out at night or have time to see how their phone syncs with the car, or use the same one over and over. All better ways to bond with a car, which Lachnit says is key to sales.
Lachnit: Honestly, one of the biggest factors in car buying is an emotional response to a vehicle.
John Bruno Jr. agrees. He’s a GM dealer in Manhattan.
John Bruno Jr.: I mean, I have a relationship with my car.
Which is exactly why he doesn’t expect car-sharing to catch on.
Bruno: Most people feel about their car the way they feel about their families. I mean, I’m not going to let someone take my wife out on a date, take her to a nice place and gimme money. I don’t know what they are going to do with her while she’s gone, and I don’t want her to be in anyone else’s hands.
Bruno says he has the best car on his block after all — which means he’d probably get a lot of takers. Unusual cars do well, like hybrids and Mini Coopers. And when Fay Wang back in San Francisco does get ready for a divorce from her beloved Saab, she’s going to car-share out that tiny European car she’s had her eye on.
Wang: You know, maybe we can we can try the Smart car one day, for a weekend for a few hours, to see if we like it.
Better than a test drive.
I’m Alex Goldmark for Marketplace Money.
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