What if an option is offered to you to be the owner of a brand-new Lexus? Or an Audi? They are unquestionably luxury cars, but what if you have an option for a long-term rental plan? It is now attainable with new avenues and options like car subscription models.
The subscription model market was valued at $-3,550.4 million globally in 2019 and is expected to reach $-12,090.6 million by 2027. Buying a car may not be a reasonable option for many. It may be a dream for a few motor enthusiasts to drive a Porsche or a Ferrari.
Well, you can have your imagination transcend to reality with the subscription model to rent a car that initially was out of your reach. Consumers are offered premium vehicles directly from manufacturers and third-party leasing companies through these subscription models.
Car subscriptions are not alien concepts anymore. So, read along to know how this subscription model ideally works.
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What Does Car Subscription Mean?
Through a subscription business model, you get access to the car of your choice with a monthly fee. What’s more impressive is that you can avoid paying a hefty amount on down payments and have complete control over the vehicle here.
Moreover, you can avoid the regular nuisance of paying the car’s EMIs and maintenance or insurance costs. If you plan a subscription, you are only expected to pay an all-inclusive monthly full-stack price that involves additional expenses.
Few car subscriptions options come with a tenure of 24, 48, and 36 months. So, even if the subscription tenure expires, you can opt for an extension and upgrade the car seamlessly.
Benefits of Subscription Model
Car subscriptions have an array of advantages that it promises to their customers. So, what are those?
It is no surprise that it costs a bomb to invest in cars. Most spend their years of savings on a purchase, and a few depend on vehicle loans coupled with the massive down payment.
On the other hand, you need not fret about down payments in subscription models as they involve zero cost. With a fixed monthly fee, you can savour all the privileges of owning a private car.
From monthly services to maintenance to insurance, you are expected to manage every expenditure when you buy. It creates an additional load on your savings and income. In contrast, car subscriptions have a different scenario altogether.
In a car subscription model, your costs are covered under the subscription charges, and hence the additional charges are backed by the car company. In short, you will be solely paying extra for the fuel through a subscription.
Usually, when a car gets old, you probably think of reselling them or disposing of it at a minimum cost. It leaves you with the mercy of investing in another vehicle again. However, you can subscribe to a new car anytime you need.
Generally, when you subscribe to a car, it carries a fixed tenure along with it. Also, you need not be concerned with the car’s resale value, as you can always upgrade to a new one once your leasing period expires.
Few reputable automakers like Audi, Porsche, and Lexus, have already embraced the subscription services. With this business model gaining momentum, it is safe to say that the trend of leasing and subscription is sure to stay in the automobile industry for a much longer time.