Different revenue to a different organization inside the OEM. When you sell a $20k car, you get maybe $1k in profit, maybe less. If you can get $8 monthly recurring revenue you get maybe $7 in profit. Also consider that the lifetime is not 5 years. The AVERAGE age of cars on the road now is over 12 years. My parents drive 20 year old cars.
Also consider the friction to cancel. Maybe you get a few more months of revenue with someone sells the car or after it gets scrapped.
To be clear, I am not arguing in favor of this kind of thing at all.
Do 2nd owners typically subscribe to optional services?
For the new car buyer, you pitch it as cost savings for the time you own the car. The OE Toyota Long Range remote starter is $1000 so if you go with the app, if you only own the car for 8 years then you're saving money as the new car owner.
However the overwhelming majority of car sales in the US are used, and the average age of the American car is now 12 years old. Outside of maintaining a spare parts supply chain, you don't gain any additional revenue from used car sales. With subscriptions, a 2020 model year car can still be generating revenue for a company in 2035. Plus you can adjust the subscription price year after year as desired.
I don't like it personally, but I can see method to the madness.
Ridiculous