With record low interest rates, stretched out financing terms and an insatiable wall street demand for subprime auto securitizations all teaming up to drive record-high auto sales, Cadillac seems to think there is little room for incremental upside in their traditional auto sales/leasing business so they've decided to pursue an alternative business strategy whereby they just sell cars to themselves instead.
While that may sound like a joke, unfortunately it's not. The service is called "Book By Cadillac" and it is set to launch in New York City on February 1st. Targeting Gen X and Y customers who are turning away from the "hassles of traditional ownership," according to Director of Brand Marketing Melody Lee, for $1,500 per month Book allows "subscribers" to drive the latest and greatest in Cadillac luxury with the flexibility to switch vehicles up to 18 times per year. For convenience, cars are delivered right to your door, have no mileage limits like traditional leases, only month-to-month financial commitments and monthly dues include all insurance and registration fees.
As Lee further points out, the strategy is intended to fill a gap between traditional ownership and rental/ride sharing services.
“BOOK is aimed squarely at Gen X and Y customers who want the experience of a luxury vehicle without the hassles of traditional ownership,” Melody Lee, director or brand marketing, told Vocativ. “BOOK fills a gap between traditional ownership (leasing, financing, buying) and the efficient, but less personal aspect of rental, car- and ride-sharing (Hertz, Zipcar, Uber/Lyft).”
While we would hate to develop a reputation of being overly cynical, in this particular case it's unclear exactly what benefit the consumer gets from Book aside from a drastically higher cost of ownership. While we can certainly understand that the burden of making a 15 minute phone call to purchase auto insurance is overwhelming for many people in New York City, we would think that that minor "hassle of traditional ownership" would pale in comparison to the hassles of, for example, having to find and pay for parking in the city, which this service doesn't change.
And while Book offers the ability to switch between vehicle types regularly throughout the year depending on mood and/or the weather on any given day, we suspect there are only a select few people who are willing to double their cost of ownership for that "convenience"...particularly when they could simply rent any vehicle they want, on any given day, and/or participate in a ride-sharing service at a fraction of the price.
All that said, we applaud Cadillac's efforts to game their sales figures provide value to their customers and wish them the very best of luck in this new endeavor.