Advantages of Car Subscription over Buying New Car and Used Car

Car subscription can be regarded as a relatively new concept here in India. You may not know or understand it but this is also a way of owning a car. In layman’s terms, this can be explained as being similar to subscribing to an OTT (over-the-top) platform whereby you pay money for a certain period such as a month as a way of paying for the services that the service providers offer you in these cases. You can always buy a car and own it but instead of that you can subscribe to such a service and pay a periodic rental fee. Such fees normally include all costs related to owning a car.

What are the benefits of a car subscription?

• No expenses upfront: When you think of the benefits that you can get from car rental services this is the first one that comes to your mind. This means that unlike owning a car you do not have to pay to buy it or take out a loan for the same. 

• Prices include everything: The fee you pay to subscribe to a vehicle usually covers all the expenses associated with owning a car. The most prominent among such expenses are insurance, repairs, and maintenance. 

• Flexibility: This is also a major benefit of car rental subscription services. It basically implies that here you are free to decide the kind of car you drive as well as the period you subscribe to it for. One of the biggest benefits of these subscription services is that they come in varied tenures. This means you can choose a car subscription for 12, 24, 36, or 48 months – whichever suits you the best. On the other hand, you can also subscribe based on the distance that you intend to cover with the car each year such as 10,000, 15,000, or 20,000 km each year for example.

• Convenience: With a car subscription service, you do not have to worry about the hassles that are commonplace with owning a car, such as getting it insured as well as servicing it. 

• Upgradability: You can always choose an upgraded version of the car that you have subscribed to presently at almost negligible additional expense each year. 

• Substantial savings: When you subscribe to a car you do not have to pay a truckload of money that you would have to if you owned it. This means that you can at least use your dream car for just a fraction of the cost that you would incur if you owned it.

What are the problems with car subscriptions?

• The subscription fees tend to add up: At times, the subscription fees can be rather high. This is the first issue with a monthly car subscription wherein the money you pay each month to subscribe to a car is higher than the EMI (equated monthly installment) you would pay if you took a car loan for the same vehicle. This is especially so when you subscribe to a high-end car or when you do so for a long time. 

• You have to contend with mileage caps: A lot of the companies that offer such subscription services have mileage caps which means that if you go over that limit you would have to pay extra fees for the same.

• You cannot customize the car: This is another issue with car subscription. The extent to which you can customize your car if you straightaway owned it is much higher than what would be permitted if you have just rented the vehicle or subscribed to it. 

• You have to pay the fuel expenses: With a car subscription you still have to pay for the fuel and considering the high and increasing prices of such products it can be a bit of a problem at times.

• It is only a short-term solution: Subscribing to a car never makes sense for the long term and this is especially so from a financial point of view. Let us assume you subscribe to a Maruti WagonR LXi with a mileage cap of 15,000 km each year for 5 years. This will cost you in the vicinity of Rs 14,396 each month. This means that in such a car subscription deal you will pay Rs 863,760 over the 5 years. On the other hand, if you bought the car you will just need to pay Rs 550,000! 

Owning a car – what are the advantages and disadvantages?

• Advantages: The biggest benefit of owning a car is the ownership factor – you are the outright owner. This means that you can customize it as much as you want to, sell it whenever you are ready to do so, and also drive it to your heart’s content. When you own a car – as opposed to a car subscription – you do not have to worry about being restricted by any mileage limit as such. 

• Disadvantages: However, it is not as if there are no issues with owning a car. First of all, buying a new car can be a rather costly proposition these days for most car buyers out there. This is especially so when you do not have an old car that you can trade in to lighten the financial burden. If you buy it on loan you will have to make a down payment. As you know already, this is not at all necessary in the case of a car subscription. On top of that, your car’s value will depreciate over time and you would have to get it repaired and maintained as well. 
  With car ownership, you will have to bear the financial implications of all these phenomena on your own. 

So, is a car subscription the ideal choice for you?

According to the estimate we provided above, owning a car makes financially a lot more sense than subscribing to it in the long term. Subscribing to cars is financially feasible and sensible only for rather short periods. Such sort of car ownership is okay when you do not intend to keep the vehicle for over a couple of years. Car subscription is also a better option when you have someone else that you can share the financial brunt with. It is also the right option for people who do not earn enough to own a car and fulfill all the financial responsibilities of the act of car ownership but have a sufficiently steady stream of income to at least rent or subscribe to such a vehicle to fulfill their needs in such cases. 

Conclusion 

Thus, the likes of a Revvcar subscription can be a blessing for people who are not immediately able to buy a car but need one for the time being at least. As a subscriber to such a high-profile service provider, you can be sure that you would be privy to a lot of flexibility as far as choosing the duration of your subscription is concerned. You will also be allowed to upgrade to the latest model of the car whenever it arrives. However, you must also be aware of the pitfalls of such financial transactions as fuel charges and mileage caps. Take these into consideration with care before you make any decision as such in this context.