The pay-per-use contract will require C4 Cactus customers to pay a fixed monthly rate that will be lower than the all-inclusive flat rate. But in addition they will incur a monthly fee directly related to distance driven, with nothing owed if the car is not driven during the period.
Pay-per-use contracts will be offered initially in Spain, Italy and the UK. Availability in other European countries would depend on such factors as the demand in each market, local legislation and reaching agreements with local insurers, Montarnal said.
“There is a portion of the population that is not willing to buy a car, but willing to buy the use of a car,” Banzet told Automotive News Europe.
Solutions such as car-sharing schemes and short-term rentals both had drawbacks in terms of vehicle availability and convenience. “We are proposing a way to only pay for the use of the car, while still having it at your disposal whenever you want it,” Banzet said.
It would be of particular appeal, he added, “for either low-mileage drivers or irregular users of the car, for instance for those who don’t use the car for some months in the year.”
One the underlying aims of both financing approaches is the avoidance of unpleasant financial surprises at the end of the contract period.
Additional discussion via Derek Kreindler.