How car dealers can simply make a profit with car subscriptions

CARIFY - July 16, 2021

#Plattform #Autohändler #Garagen #AutoAbo

CARIFY has been shaking up the car market since 2019 with its flexible car subscription service. After just two years, the young company has grown to become the largest car subscription platform in Switzerland and is one of the finalists of the Swiss Economic Awards 2021. This success would not have been possible without the cooperation with the car dealers. In an interview with Sandro Compagno, the editorial director of the AGVS, the founders Sergio Studer and Raffael Fiechter tell us how CARIFY is revolutionising the car market together with the garage owners.

Finally, a free solution for car dealers to generate more sales through innovation

With the vision of creating flexible mobility in Switzerland that responds to individual customer needs, Sergio Studer and Raffael Fiechter founded the CARIFY AG in May 2019 in a construction container in Solothurn. Instead of buying or leasing cars themselves, CARIFY's business model was built on the idea of a platform that connects both customers and garage owners. In other words, it is about creating a win-win situation for customers and garage owners. Customers can flexibly subscribe to a car without worrying about hidden or volatile costs. For the garage owners, CARIFY represents another source of revenue and creates the technical platform to respond to changing customer needs without having to build the infrastructure and thus make high investments themselves.

In order to expand CARIFY's car offer and thus meet the demand for car subscriptions, AGVS and CARIFY entered into a cooperation with each other in autumn 2020. The following questions were answered in an interview with Sandro Compagno:

Why should car dealers offer cars on subscription with CARIFY?

  • How much turnover can garages generate with CARIFY?

  • Does the cooperation with CARIFY cost anything for garage owners?

  • Who decides how much a car subscription costs?

  • What happens if a car is returned with damage?

  • Which customers book a car subscription?

  • What goals does CARIFY want to achieve in the coming years?

Would you rather hear the answers directly from Raffael and Sergio? Then you can access the podcast here.

Why should garage owners offer cars on subscription with CARIFY?

There is not only one answer to this question. On the one hand, CARIFY partners benefit from another source of revenue, free marketing, networking, access to customers and a new product in their portfolio. On the other hand, it is about helping to shape the change in the car industry and providing an answer to electromobility, new regulators and changing customer needs. Due to Netflix & Co. the following consumer trends have become steadily more important in recent years:

  • Flexibility - monthly cancellation period

  • Convenience - order online & no paperwork

  • Cost transparency - no hidden or volatile costs

Believe it or not. In the countries around us, such as Germany, Italy or France, the car subscription has already experienced high market growth. In Switzerland, too, demand is increasingly growing. 

In summary, CARIFY offers garage owners the opportunity to offer flexible and all-inclusive mobility to new customers and to be part of the technological progress.

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How much turnover can garage owners generate with CARIFY?

The garage owner earns money with CARIFY right from the start. The more cars he or she rents out, the more turnover can be realised accordingly. In addition, there is also the possibility of selling the car to the customer at the end of the rental period, if there is interest. Apart from the monetary compensation, garage owners can bring their cars to an attractive mileage level, in which the used car can subsequently be sold more easily. 

In summary, no exact turnover figure can be given, but the fact that over 200 garage owners are already participating in CARIFY speaks for itself.

Does the cooperation with CARIFY cost anything for garage owners?

No. All you need to join CARIFY are cars. Thus, every garage owner can become part of the CARIFY network. The CARIFY software was specifically built with the background that car dealers do not have to make any additional investments and can rent out cars with as little additional effort as possible.  

An example: Within 15 minutes, the garage owner has a CARIFY account and can offer his cars on a subscription basis by activating them and checking and adjusting the remuneration beforehand. As soon as a car is booked, all documents are sent to the car dealer and the credit check, insurance and customer contact are handled directly by CARIFY. Through the joint work between the car dealer and CARIFY, the customer can then take delivery of their car within 7 days. Simply uploading the cars and getting to know the platform is non-binding and can be requested at any time via mail or telephone.

Who decides how much a car subscription costs?

The short answer to this is: the garage owner.

While a garage owner's cars are uploaded to the platform, the algorithm calculates price and remuneration proposals based on the vehicle data and empirical values. As soon as the upload is complete, the garage owner goes through the vehicles and remuneration proposals and decides which vehicles he or she would like to offer on a subscription basis and at what remuneration. This means that the car dealer can increase or decrease his remuneration and adjust it according to the minimum term. The subscription price is adjusted accordingly.

What happens if a car is returned with damage?

Damage that has occurred during the term is generally repaired directly at the garage. Depending on the type of damage, a deductible may have to be paid by the customer. At CARIFY, we are particularly fortunate in that we work with a very good insurance partner.

At the same time, we use technology that records the condition of the vehicle before handover and after return so that discrepancies can be identified. So, we have a fair process to control what is normal wear and tear and what is effectively damage. 

With the app, we also record how many kilometres the car had when it was handed over and can calculate when a service is due based on the kilometre package. So, we always know when a car needs maintenance. Most of the time, however, the customers themselves report when something lights up. 

In a nutshell: Damages and services are always handled directly and straightforwardly at the garage.

Which customers book a car subscription?

There is no specific customer group at CARIFY. Our customer base is very diverse. It ranges from 18-year-old apprentice who needs a car to get to work to the CEO of a major corporation. 

But what is increasingly coming to the fore is the trend towards electric cars. Customers feel a great deal of uncertainty about electromobility: How does charging work? What about the range? How does the technology work? In the area of electromobility, there are great inhibitions about buying a car. A car subscription is the perfect transitional model for testing electric mobility without having to make a large investment. Once you have found the perfect electric car, you can buy it or continue to drive it on a subscription basis. If you are not satisfied, you book a new car subscription.

What goals would CARIFY like to achieve together with the car dealers in the coming years?

In five years, every garage owner should have the chance to succeed independently with CARIFY's new business model. We want to help the garage business and give car dealers the opportunity to respond to new customer needs and become part of the largest car subscription platform in Switzerland. Together with the garage owners, CARIFY wants to further develop mobility in Switzerland in the coming years!

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