Honda Civic as a Service

Honda Civic as a serviceI’ve always driven Hondas — literally since my very first car. My Dad was kind enough to give me his old Honda Civic hatchback shortly after I graduated from college in 1993, and ever since then I have been a loyal Hondaist. And now I am in the market for another one.

To be sure, each and every one of my Hondas has been a high mileage veteran. I tend to buy ten-year-old models with at least 150,000 miles on them, get five or six great years out of them, and then donate them to charity when their time has come.

I’ve never paid more than $2,000 for a car, and I have always felt it was a sort of privilege to be the last, loving owner of these steadfast vehicles.

But over time, I will admit that I have grown weary of unexpected repairs and breakdowns, of non-functioning air conditioning and feeble heat, of having to wait ten years for basic safety features like side airbags and stability control, and of being a decade behind the curve on other upgrades, like CD players, remote key systems, and satellite navigation systems.

So now that I find myself comfortably stabled with a good salary, after years of freelancing, school, and other less-than-lucrative pursuits, I consider myself ready to (oh my goodness — my father should probably stop reading now) Buy a Brand New Car.

In the process of exploring my purchase options, I have naturally come across the many leasing deals out there. Never having been in the new car market before, I never really gave these options too much thought. But it’s gotten me thinking — about leasing, about buying, and about how our reactions to these questions change, depending on what it is we are considering buying.

Should I lease or should I buy?

Now, there has been lots and lots and lots written on this topic, ever since the option to lease a car came about.  I’m not really here to recap it, summarize it, or even try to come down on one side or the other of it. What I’m more interested in is how we think about purchases and use-of-product these days, and how that varies with the type of product concerned.

My good friend Cindy is a die-hard leaser. She loves knowing that her car is new, that it will not break down on her, and that if anything goes wrong it is under warranty.  She, like me, spent a long time driving old cars that frequently broke down, and she got sick of it and started leasing — and vows that she will never go back. She says, “I’m happy to rent an apartment if it means I can call the landlord whenever the toilet breaks. Why shouldn’t I rent my car?”

The Software-as-a-Service Metaphor

How is this like Software-as-a-Service? One of the great things about SaaS is that you don’t have to buy one great big piece of software, install it on your own servers, with all the uptime and maintenance responsibilities that implies, and then have to shell out even more money every time an upgrade or new edition is released.

When you buy software as a service, however, the issuing company hosts and maintains it, and assumes the responsibility of keeping it up and functional. New upgrades, improvements, and editions are rolled out to subscribers as they become available. Unless you choose to hold back on any given update, you are always rolling with the most recent version of your software.

As a heavy user of SaaS across a number of different platforms (and an employee of a SaaS company), I am clearly strongly in favor of this model. So why so much resistance against applying this model to the purchase (or lease) of a car?

I realize there are issues of equity and residual value and the time value of money — but for the sake of argument let us assume that I have resolved those issues by deciding to invest an appropriate amount of money in a long-term, interest-bearing account that will make up for any possible monetary loss incurred by leasing.

Is it purely a matter of category?

It seems to me that a car is simply — for most of us — in another category altogether. We feel more personally connected to a car than we might to a computer system or a piece of accounting or marketing software. But should we?

I think we still feel like anything related to “the internet” is somehow less real, less true, less vitally important, than the things we can see and touch every day.  Friends I make and maintain on social networks are considered by many of my less tech-savvy friends to be far looser ties than they really are.  Businesspeople who are new to the concepts of inbound marketing frequently struggle with prioritizing the time and effort it takes to write a blog, and to engage on social networks, over the time and effort (and money) it takes to advertise in magazines, at trade shows, or on billboards.

We still think there is a difference between “Real Life” and “The Internet.”

There isn’t.

Can this account, at least in part, for why we are willing to “rent” software, in return for consistent maintenance and frequent upgrades, but we are largely unwilling to do so for a car?

I think it has something to do with it.

What do you think?

1 Thought.

  1. I loved reading your written word once again. it has been so many years since I have had the opportunity. I am reminded of you everyday in my daughter and this just sealed the envelope.Awesome analogies.

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