Big shift: Subscription fees hit the auto industry

INDIANAPOLIS — There’s a big shift coming to the auto industry: experts say you could now be paying monthly fees when it comes to certain features in your car.

With many new models, the sticker price is just one piece of your investment.

We see monthly subscription fees everywhere in our everyday life, from our cell phones to our TV services to our gym memberships. Now, it’s coming to cars. New car buyers could be looking at paying a monthly fee for a feature as simple as a seat warmer.

Auto expert Nik Miles said the cost of technology is hitting the auto industry. Cars are no longer just hardware–they’re computers on wheels. Miles said this software costs money to develop, maintain and update.

These days, when buying a car, you’re not just asking what your monthly payment will be, you’re asking what features come with the car and what you’ll have to pay extra for. 

“They lost $10 billion this year in the auto industry, due to something completely different — tariffs, but these guys need to become whole again. So, they need to find a way to do it, but don’t annoy us, don’t make me pay for things I don’t want. I’m trying to reduce them so less would be more for me,” Miles said.

Some existing examples include Toyota charging $8 a month for their automatic start system, if you choose to continue the service after the 1-year trial. For $50 a month, you pay for internet connection and some special driver-assisted features.

In a new Ford model, you could be shelling out $50 a month for hands-free driving. 

General Motors is now offering its Super Cruise System via subscription after a trial period and making the decision to remove Apple Car Play and Android Auto, shifting to its own subscription-based platform. On its website, GM said the switch will make for a more centralized system delivering “10 times more software updates for new features and 1,000 times more bandwidth for faster connectivity, richer entertainment, and future AI workloads.”

However, Miles thinks it’s short-sighted.

“I’m trying to reduce the amount of money I pay every month. We already have to pay over $1000 for a new iPhone or a new Android, whichever it might be. I don’t want to pay another $50 a month just to navigate somewhere. I’m going to pop it up on the dash and just use it that way.”

If you value the latest connected services, Miles said you might be comfortable with a model that charges these subscription fees. On the other hand, if you prefer limiting your monthly spending and plan to keep a car for a long time, a model that locks features might not suit you.

These changes are all very brand and age dependent, and some of the features really might not be necessary for you. It’s just more to consider when heading to the dealership.