Car rental
Insurance companies are positioning themselves in the car subscription market: Zurich is now also involved
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Renting cars instead of buying them is a trend. The insurance company noticed this and joined the startup Carify. But the competition has also positioned itself.
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Car subscriptions are likely to grow strongly in the next few years.
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Being able to drive a new car without leasing it and without having to worry about spending: that’s what car subscriptions promise. Various new providers have appeared in the last two years. The market is increasingly competitive. Insurers are particularly interested in this. A kind of «proxy war» of insurance companies is looming.
After Zurich entered into a strategic partnership with the car subscription provider Carify at the beginning of September, the insurance group is now also investing financially. This is shown by a message from the company. How big the participation is is not communicated. In addition to Toni Piëch, son of ex-VW boss Ferdinand Piëch and ACE & Company, an investment company that has invested in SpaceX from Elon Musk, Airbnb and Uber, the start-up is getting another financially strong investor in Zurich.
Strongly growing market
“The market for car subscriptions has grown strongly in recent years and will continue to play an important role in the future,” says Juan Beer, CEO Zurich Switzerland. You looked at several providers, the business model and the Carify team were the best fit for Zurich, he says. “Together we will develop innovative mobility solutions for the customer needs of the future.”
Car subscriptions are characterized by a predefined duration and kilometer packages. After the expiry, the cars have to be returned, whereby an extension and, more rarely, a purchase is usually possible. During the term, all costs are included except for refueling – i.e. service and maintenance, vehicle taxes, tire changes and insurance. Car subscriptions are believed to have huge potential: While they currently account for less than 2 percent of new registrations, it should be 40 percent by 2030.
Zurich, furniture, Axa
Carify, founded in 2019 by the two HSG graduates Sergio Studer and Raffael Fiechter, is already calling itself the “largest car subscription platform in Switzerland”. Customers can choose from over 500 cars and rent a car for between 1 and 24 months. In contrast to other car subscription providers, Carify customers get their cars from a local garage, not from Carify itself.
Car subscription providers
Selection, information according to website as of July 23, 2021
| providers | Models | Terms | Remarks |
|---|---|---|---|
| Carvolution | 35 | 3 – 48 months | Partnership with Swiss Mobiliar |
| Clyde | 1 – 12 months | Minimum terms | |
| Carify | Hundreds | 1-12 months | Cars are offered from garages; Participation in Zurich |
| Upto | 18 | 6 – 36 months | Axa offer |
| Emil Frey | 8 | 6 – 12 months | Also rents e-bikes |
| Arval | 22 | 36 – 48 months | Also through sales partners like Navigas |
| Flatdrive | 30 | 3 – 36 months | Cars with Bern license plates |
| Sixt+ | from 1 month | Can be canceled monthly after 30 days | |
| Hertz Minilease | 19** | from 1 month | Can be canceled monthly after 30 days |
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However, Carvolution is number 1 in the market. The company, founded in 2018, already has around 60 employees. Insurance is also involved with the Bernese car subscription provider. The Mobiliar insurance cooperative has been investing since 2019. It took part in a financing round of just over 11 million francs and a year later injected another 50 million francs. Francisco Fernandez, the founder of the software company Avaloq, and a Ringier finance company will also be there. This relationship is reflected in the regular advertising on “Blick.ch”.
On Tuesday, Carvolution also announced that it would take over the “Green Class” product from SBB. Under Green Class, SBB offered subscriptions for electric cars in combination with a bonus. Carvolution will now take over Green Class on January 1, 2022 at an undisclosed price.
And finally, the insurance company Axa is also involved in car rental. Axa launched the Upto service together with Swisscom in 2017. However, the telecommunications company got out again a year later.
Number of new registrations for car subscriptions at around 2 percent
Surprising, because there is great belief in the model. In addition to insurance, the car dealer Emil Frey, the provider Flatdrive and the rental car companies Hertz and Sixt are also attracting customers in Switzerland with their own subscription model. The major bank BNP Paribas has also been renting cars on subscription to Swiss private customers via the fleet management offshoot Arval for several months.
In a few days, the German provider ViveLaCar also wants to launch an offer for Switzerland. ViveLaCar already operates the car subscription for BMW and Mini in this country and recently also for Renault. Cars of several brands are to be offered on the new platform.
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