Used car subscriptions gain popularity in Japan

Subscriptions for a wide variety of products have become commonplace around the world, and Japan’s younger generations have recently started using them for used cars, amid a delay in car delivery caused by shortages. chip world.

“At first I thought about buying a new car, but its delivery date was far in the future,” says a man in his 20s from the city of Oita in southwestern Japan. He started subscribing to the “Teigaku Carmo-kun” service from November 2022, pays a monthly fee of 33,000 yen ($250) and drives a Honda Grace mini-sedan.

The system offers an online list of some 5,000 used cars, providing subscribers with a car of their choice that can be delivered within four days. Drivers must pay for their own gas, but have no mileage limit.

Unlike car rental, which requires a minimum three-year contract, subscriptions can be renewed annually. Although Carmo-kun also supplies new cars, used cars have gained favor among the younger crowd – mainly 20-somethings and 30-somethings living in Tokyo suburbs and regional areas – for their inexpensability.

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The Carmo-kun service operated by Nyle Inc. started in 2018. The company said it nearly doubled the number of its contracts in 2022 for used cars from the previous year as new car deliveries have been delayed due to shortages. of chips affected by COVID-19 and the war in Ukraine.

The system offers an online list of some 5,000 used cars, providing subscribers with a car of their choice that can be delivered within four days.

As a result of the deferrals, used car prices have also risen along with interest in subscriptions.

“The rise in popularity has also been fueled by people’s changing travel styles from public transport to cars in an attempt to avoid infection,” says a public relations representative for Nyle.

According to the JMA Research Institute, in fiscal year 2025 the car subscription market is expected to grow to 50 billion yen, or 25 times more, compared to fiscal year 2019.

Automakers have also entered the used car underwriting market in response to growing demand, with Suzuki Motor Corp. and Kinto Corp., a car leasing company within the Toyota Motor Corp. group, joining the contest last year.