I don't know what the problem is here. Instead of adding $300 to the cost of the car, you now add $0, and then after year 1 you pay $80/year.
Maybe it's different in America or something, but in the UK approximately 100% of BMWs are leased, or bought with some kind of loan secured on the vehicle (I think based on estimated resale value when the period is up). So the "owner" will have the car for 2-3 years, maybe 4, then they'll chop it in for whatever's newer at the time.
With that in mind:
1 year. Old way: $300. New way: $0.
2 years. Old way: $300. New way: $80.
3 years. Old way: $300. New way: $160.
4 years. Old way: $300. New way: $240.
Cheaper!
5 years. Old way: $300. New way: $320.
OK, but I wonder how many people keep their car for this long?
It has allowed BMW to convert their cars into appliances which are renewed every three years. The program has been successful for BMW because 60% of their owners keep their cars for three years or less.
A perpetual car loan is as good as subscription revenue.
Anecdotal, but I expect to keep my car until it dies. I have a 2004 3 series that's at ~240k miles. I would just factor the $80/year for 15 years into the price of the car when shopping.
And you really think that CarPlay will be supported over 15 years and you use a supported phone for all that time? Seems, in your car usage scenario you‘re better off with a subscription you can cancel any time.
I think that goes to the argument "It doesn't cost BMW money continously, it shouldn't you". It's actually quite likely that IF it is still used in 15 years, that's because the software was updated in that time to match new capabilities/usage patterns. This incurs real cost to BMW. But I suspect that BMW would recoup that cost by selling the updates.
Exactly. This is good for BMW, and that's why they do it.
The initial keeper is happy, because it's cheaper for them. ~100% of them will lease it for <4 years, and you can consult my table to discover this.
Subsequent buyers are less happy... but, wait, fuck those guys. When N>0, the Nth owner pays owner N-1, not BMW. So previously BMW would see nothing from these transactions. And now there's a >0% chance these subsequent owners will pay them $80/year.
(Many software vendors have been trying to move to a subscription model. They want the recurring revenue. The iOS and Android video game markets have by now almost entirely switched to a free-to-play model - which is basically the same thing, just with a more compelling free sample, so they can sucker in the punters. This is basically the same!)
This might make a dent in resale values, but I assume the >0% chance of getting $80/year from future owners makes up for this. I do admit, though, that I really don't have a good feel for how this would play out.
Of course, people that buy a BMW with the intention of keeping it for >=5 years will get the shaft.... so I expect you can be sure that they've got good evidence that most keepers of a new BMW get rid of it before that point.
Maybe it's different in America or something, but in the UK approximately 100% of BMWs are leased, or bought with some kind of loan secured on the vehicle (I think based on estimated resale value when the period is up). So the "owner" will have the car for 2-3 years, maybe 4, then they'll chop it in for whatever's newer at the time.
With that in mind:
Cheaper! OK, but I wonder how many people keep their car for this long?