Want a car but don’t want the headaches and complications that come with the ownership process, then car subscription is for you. In this, you can subscribe a car with a deposit or a down payment and then pay a monthly fee for the period you have chosen. Leasing and subscription are interchangeable terms and getting into either programme would end in you having borrowed a car!
The advantage of a car subscription program is that you can give up the car at any time while availing full-time RSA (roadside assistance). You can also upgrade to a newer model and your maintenance, insurance, and taxes are all covered in the monthly subscription fees. This has been a popular model of car ownership in the US and Europe for many decades now.
Think of a car subscription in the same manner as living on rent. You pay a fixed monthly fee for using an asset which covers its maintenance and upkeep. Your only other costs are consumables which, in the case of the car, are petrol, toll, and cleaning charges.
The car subscription system allows for even more flexibility as you can pick the number of kilometres that you will drive every month and thus would be able to get an even lower subscription fee. To elaborate on this, if you have a fixed distance that you drive every month, then you can get a tailor-made plan for a price that suits your budget. In fact, you can subscribe a car with the standard IND design white plate with black text or green board with white numbers if you have gone in for an electric car.
Meanwhile, a car loan is a much more elaborate process involving banks, dealerships, and, of course, the automaker itself. This is a financing process for traditional car ownership where you buy the car on borrowed money (plus interest) and pay a monthly instalment over a fixed period to ultimately become the complete owner of the vehicle. In this case, you also pay for maintenance, insurance, RSA, and taxes — all out of your own pocket.
The standard documents that any car subscription service would require are a PAN card, Aadhar card, driver's license, and income proof. Depending on whether you are taking the lease as a private buyer, business owner, or in the name of a company, you have to submit bank statements, IT Returns, proof of business ownership, or profit and loss statements for the last six months.
A majority of the car subscription packages will comprise government payments, roadside assistance, service packages, and clauses for early termination of the lease. Depending on your subscription plan, it will also include a kilometre limit as well as the charges per km once you have crossed your subscribed distance limit.
A car subscription process is what we have detailed in the last 500 words whereas, for car rental, you pay a fixed fee to use the car for a shorter period (usually a week or under). Car rentals are popular for vacations or immediate business use. You can either rent a car and get behind the wheel or use a rental car from a travel agency that will provide you with a driver. Further, you can also pick up a rental car in one location and drive it to another location but that would demand a higher fee.
The major OEMs like like Hyundai, Maruti Suzuki, Mahindra, MG, Nissan, and Toyota all have their own individualised car subscription packages.
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