[MachinesWithSouls]

I usually do a mailbag every Friday on my site, and this week someone asked about the upcoming subscriptions for heated seats and the like.

But I don’t necessarily think it’s such a bad thing, since it’ll enable you to turn off features you don’t need. Instead, direct your anger at the bottom line price.

Walk into a BMW store now, and you’ll pay 10 grand more for an M3 compared to just 2 years ago.

FRIDAY MAILBAG: STOP WORRYING ABOUT BMW SUBSCRIPTIONS

[Entropy89]

I flip flopped on this a lot when it was announced. Af first I was really pissed that BMW would charge subscriptions for something as basic as heated seats. My thought was anything to screw the customer out of more money.

Then I thought about it for a while and realized that it makes sense if you only need or want heated seats in the winter then summer becomes cheaper. Similar to what you said and it makes sense.

But the more I think about it, the more I absolutely hate the idea of having to pay for any subscription in something I “own”. I can get past a subscription for digital services to an extent, I understand they need constant updates and thats not necessarily cheap but even still nobody should have to shell out hundreds of dollars a year for small and somewhat meaningless updates. So charging for the privilege of heated seats, which does not get updates or changes, seems completely idiotic. I also doubt there will be a monthly fee, BMW will probably make the driver purchase a certain number of months at a minimum.

BMW is not the first company to charge subscriptions and they definitely won’t be the last. I think things like this become a steep and slippery slope of never actually owning the equipment in your $50,000+ car. Soon they will charge subscriptions for higher output headlights, or more speed (as MB is doing now). Or even dumber things like massaging seats or extra bolstering or *gasp* ventilated seats, maybe even safety tech like the very basic blindspot monitoring (I’m speculating but you get the point). If you pay, in excess of $50-60 thousand dollars (or more) for a car then you shouldnt be nickel and dimed for basic features that are available as standard on some cars costing less than half. Literally just a cash grab because they think they can. Apologies for the long rant but I’ve been driving Bimmers for almost 20 years and it’s a little frustrating to see the direction the company is heading in.

[MachinesWithSouls]

You’re correct - but at the end of the article I mention the MSRP and the steep increase in just 2 years.

I know it’s a business and they need to make money, but at some point it’ll get out of hand. Hopefully not too late for them to realize.

[Entropy89]

Agreed, itll be interesting to see what happens when more of their fleet becomes EV. I think the industry will be heavy into subscriptions in the next 10 or so years.

[nerdogray]

Is this Bizarro World or what? How can everyone be so lasse-faire? You think they're going to reduce the price to accomodate a subscription cost? Justifying subscriptions based on the argument of financing? What am I reading?

[MachinesWithSouls]

Originally Posted by nerdogray

Is this Bizarro World or what? How can everyone be so lasse-faire? You think they're going to reduce the price to accomodate a subscription cost? Justifying subscriptions based on the argument of financing? What am I reading?

The point is, you’re already paying a subscription, unless you do cash.

The bigger crime is the price increase. You’re worried about 18$ a month, I’m worried about 10k.

[Entropy89]

Originally Posted by MachinesWithSouls

The point is, you’re already paying a subscription, unless you do cash.

The bigger crime is the price increase. You’re worried about 18$ a month, I’m worried about 10k.

Yes and no, the price increases because now the manufacturer is going to include the feature whether you wanted it or not. So the 10K extra will get you a loaded car, you dont have a choice in that… but if you want to actually use those features you gotta still pay more.

Also if someone were to buy a car outright, or pay over 3-5 years, at the end of the term they still have to pay a fee to use certain features? Optioning the feature up front and paying over the course of the loan or lease of the car is different than a subscription. Unless the subscription is free after you’re done paying off the car.

[MachinesWithSouls]

Originally Posted by Entropy89

Yes and no, the price increases because now the manufacturer is going to include the feature whether you wanted it or not. So the 10K extra will get you a loaded car, you dont have a choice in that… but if you want to actually use those features you gotta still pay more.

Also if someone were to buy a car outright, or pay over 3-5 years, at the end of the term they still have to pay a fee to use certain features? Optioning the feature up front and paying over the course of the loan or lease of the car is different than a subscription. Unless the subscription is free after you’re done paying off the car.

77% of people lease a bmw. They will cater to the majority.

And the 10k has already happened. The M3 has a $2,700 price increase for 23, and there are no discounts.

[NYG]

It's a horrible thing.

You're just conditioning the public to not actually own anything they spend their money on. At it's very core it's an absolute garbage of an idea.

[MachinesWithSouls]

Originally Posted by NYG

It's a horrible thing.

You're just conditioning the public to not actually own anything they spend their money on. At it's very core it's an absolute garbage of an idea.

I can’t speak for every single person, but chances are people don’t own their house, cars, or even their own education.

Regardless, if you read through the article, you’d notice the real issue is the amount they’ve added to the price without giving you anything at all. Which is worse?

[NYG]

Originally Posted by MachinesWithSouls

I can’t speak for every single person, but chances are people don’t own their house, cars, or even their own education.

Regardless, if you read through the article, you’d notice the real issue is the amount they’ve added to the price without giving you anything at all. Which is worse?

I'm a capitalist so if people still purchase these cars at ridiculous prices then more power to them.

From what perspective don't they own those things? Taxation or loan?

[MachinesWithSouls]

Originally Posted by NYG

I'm a capitalist so if people still purchase these cars at ridiculous prices then more power to them.

From what perspective don't they own those things? Taxation or loan?

Loans.

Haha taxes - I’m in NJ, maybe you are too? Jokes on us.

[NYG]

Originally Posted by MachinesWithSouls

Loans.

Haha taxes - I’m in NJ, maybe you are too? Jokes on us.

Monmouth, my township actually isn't bad considering what I was paying in Brooklyn 2 years ago.

[MachinesWithSouls]

Originally Posted by NYG

Monmouth, my township actually isn't bad considering what I was paying in Brooklyn 2 years ago.

You’re lucky. I’m in Middlesex, bordering on Monmouth. Not as bad as northern NJ but not wonderful.

[TheMaxXHD]

So, I am not entirely against the idea, providing some caveats don't come into play.

Technically, the idea is that while yes, your car may have a feature it already came with you can't use without paying, it also means you didn't pay for it via a package when you bought it, like one would normally do.

In theory, with this concept, your car is equipped with something you didn't actually pay for, and BMW is merely giving you the option to pay for it later, or not at all.

Also in theory, this would mean BMW, not the consumer, is swallowing the cost of putting features in the car that not every customer paid, and may never pay, outright for.

The caveat is, this only remains true if the price to pay afterwards is 1.) able to be a one time forever purchase and 2.) that one time price is the same as if you had just purchased it upon build.

It also only remains true in the case of a monthly fee if the monthly fee break even point with purchasing it outright makes some sense. For example, you only want heated seats for 3 months of a year, and only plan on keeping the vehicle for 4 years. If the monthly fee is $20/month ($60/year in this case * 4 = $240 for 4 years) but outright is normally $300. Then monthly would be cheaper.

Subscriptions give consumers more choice over what and when to pay. Ultimately, what it is supposed to do is reduce the price of vehicles for those who don't want said features. While not locking them into a vehicle without said features if they do eventually want them, which in itself is not very consumer friendly, because it encourages upgrading to a newer car if your car you bought 4 years ago you didn't buy every package but want more now, and this is the current way the car market operates.

MB's acceleration though, makes no sense, because the problem with that is, those who DON'T pay for it, never got a price decrease on the car, and those who DO want it have to pay even more, meaning the illusion of consumer choice is broken.

It really depends on the situation. Subscriptions CAN be actually a pro-consumer thing, however, they can be equally anti-consumer. It depends on what it is, how much it is, and the benefits of not paying vs paying.

[NYG]

Originally Posted by MachinesWithSouls

You’re lucky. I’m in Middlesex, bordering on Monmouth. Not as bad as northern NJ but not wonderful.

Old Bridge?

[MachinesWithSouls]

Originally Posted by NYG

Old Bridge?

Yes.

[NYG]

Originally Posted by MachinesWithSouls

Yes.

We're practically neighbors. We've probably driven past eachother on 18 or 9 lol.

[LogicalApex]

Subscription for hardware features are a dumb idea and BMW needs to drop period. Their “subscription” is a lease. They shouldn’t be trying to double dip.

It bit them hard with CarPlay they need to cut it out.

Originally Posted by MachinesWithSouls

I can’t speak for every single person, but chances are people don’t own their house, cars, or even their own education.

Regardless, if you read through the article, you’d notice the real issue is the amount they’ve added to the price without giving you anything at all. Which is worse?

You seem to not know the difference between a loan and a subscription. They aren’t the same thing at all.

If you purchase a house with a Mortgage you actually do own the house. The bank has a lien against the house until the loan is satisfied, but the bank is not listed as an owner and they bank can’t control what you do with the house. If you miss a payment the bank has to sue in court to enforce their lien and can’t just show up and kick you out… They also aren’t required to pay taxes on the property and so forth since they aren’t the owner.

If you have a subscription you have no ownership interest at all and are required to continually pay to avail yourself of the feature. It is the difference between renting and owning.

…

[MachinesWithSouls]

Originally Posted by LogicalApex

Subscription for hardware features are a dumb idea and BMW needs to drop period. Their “subscription” is a lease. They shouldn’t be trying to double dip.

It bit them hard with CarPlay they need to cut it out.



You seem to not know the difference between a loan and a subscription. They aren’t the same thing at all.

If you purchase a house with a Mortgage you actually do own the house. The bank has a lien against the house until the loan is satisfied, but the bank is not listed as an owner and they bank can’t control what you do with the house. If you miss a payment the bank has to sue in court to enforce their lien and can’t just show up and kick you out… They also aren’t required to pay taxes on the property and so forth since they aren’t the owner.

If you have a subscription you have no ownership interest at all and are required to continually pay to avail yourself of the feature. It is the difference between renting and owning.

…

Semantics. Don’t pay your monthly bill, and the object you’re paying toward goes away.

[LogicalApex]

Originally Posted by MachinesWithSouls

Semantics. Don’t pay your monthly bill, and the object you’re paying toward goes away.

Not semantics. And, no, not the same!

With a lien the bank has to go through a court process to have the court enforce the lien. That court could actually require that the bank accept new terms and losses and still not actually get ownership of the property or even toss the lien entirely!

A subscription doesn’t require any adjudication by anyone. BMW can decide to raise the price or change the terms at any time and there is no recourse. They could even decide to just cut the feature off period and, again, there is no recourse.

…

I guess it is no surprise you’re OK with it since you aren’t well aware of the differences between a subscription and a loan.

[Bruuuce]

So the cost to produce get lower, every car is the same. Thinking that added efficiency on the line...

Then charge for the hardware feature implemented per owner. Life long profits.

I doubt they are not making their money back on the initial purchaser, if they are not, that is bad on them.

Hoping I don't need anything but a cheap commuter from now on, but who knows.