Citroen’s solution to a lack of young buyers is an innovative pay-per-use plan based on mileage, offering access to new cars rather than outright ownership. The plan is being rolled out in select European countries, and could offer Millennials all the benefits of car ownership without being tied to the vehicle.
The plan is being rolled out on the new Citroen C4 Cactus crossover, which is being offered with two types of pricing plans. The traditional flat rate plan costs 199 euros per month for 36 months, and includes insurance, maintenance, and 45,000 kilometers, or about 30,000 miles of driving. Pretty standard stuff here, right? It’s a pretty good deal, wrapping maintenance and insurance up in the cost, but you’re still looking at about $275 a month.
That’s way more than even the most expensive cellphone plan, the payment many automakers want to emulate. You can usually get a brand new phone and a service contract for around $100 a month. While the Cactus comes in at a featherweight 2,100 pounds (!!) and uses a BlueHDi turbodiesel engine to achieve as much as 91 MPG, you’re still shelling out a lot of money for fairly basic transportation. How can automakers compete?
Citroen’s alternative to the traditional payment is a lower cost lease plan they say will save drivers money by changing them based on miles driven, rather than paying for thousands of miles up front. Basically, you pay a low flat monthly rate, and are given X-amount of miles to drive per month. Drive more than your allocated miles, you get charged more. Drive less, pay less. Don’t drive at all? Your only cost is the monthly “membership” fee. but you aren’t charged for any miles you didn’t drive. In fuel-obsessed Europe, every euro that isn’t fed into transportation is a blessing.
Obviously aimed at city dwellers, this plan gives buyers unfettered access to a brand new Citroen at a much lower cost, tied to their driving habits. It’s the same way mobile phone companies have offered users access to the highest-quality phones for little or no cost, and would help avoid large payments for extra miles at the end of a lease. It’s a hybrid car-sharing plan and standard lease agreement, but minus the sharing and balloon payments, the worst parts of either plan.
For automakers, this plan might just be a way to get us Millennials into all of those new cars they’ve spent billions making and marketing.
Source: Automotive News