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Why Should You Opt for Car Subscription, Leasing Over New Car and How Does it Work: Explained

Edited By: Arjit Garg


Last Updated: April 12, 2021, 13:59 IST

Image used for representation. (Photo: AFP Relaxnews)

Image used for representation. (Photo: AFP Relaxnews)

It would be fair to mention that subscription-based models of owning cars are gradually gaining traction among consumers says Sunil Gupta, MD & CEO, Avis India.

Earlier, the available options to drive a car were to either buy a brand new vehicle, buy a used vehicle or borrow one from a friend. However, for some people buying a new car may not be a feasible mobility solution considering the financial aspect related to it. Also, borrowing a car is a big task as well, keeping in mind the trust factor. This is where alternative options like car subscription model and shorter tenure leasing options come into the picture.

Car subscription and leasing are not foreign concepts anymore since a large number of people today are preferring this against buying a brand new car. This is because subscribing to a car or leasing a car is not merely financially sound but also offers several other perks like privacy, safety, flexibility, and convenience. So, let’s delve deep into how a car subscription model works?

What is a car subscription?

A car subscription is a plan that grants customers access to a vehicle in lieu of a monthly fee. Subscribers can get complete access to the car without having to pay a heavy down payment or monthly EMIs, the maintenance cost of the car, or pay for insurance. Instead, they just need to pay an all-inclusive monthly fee that covers complete maintenance, insurance, and roadside assistance.

Additionally, another benefit of a car subscription service is that it is a hassle-free mobility solution, giving users the freedom and flexibility to drive their favourite car without the need of buying it. And if one has a longer term requirement, one can opt for a long term rental car with or without a chauffeur and if one is looking at a 12 month time period, one can opt for a short tenure operating lease as well.

How does a car subscription/leasing service works?

Well, customers just need to subscribe by paying a monthly/yearly fee and get to drive the car. Though they will have to pay for the fuel, however, all other costs such as registration charges, insurance, maintenance, and road tax are taken care of by the leasing company. Moreover, a subscription plan or an operating lease comes with tenure options of 12, 24, 36,48 and 56 months and once the subscription/leasing tenure is over, users can either opt to extend, upgrade or downgrade the vehicle based on their requirements and convenience. So say, for instance, a customer who was driving Baleno can now have the luxury to drive EcoSport.

When and who can consumers opt for a car subscription plan?

A car subscription plan isn’t only for those who don’t own a car. In fact, one can choose to rent or subscribe to a car for several reasons such as when planning family vacations, going on business trips, or as a replacement to a car that’s being repaired. Be it any circumstance, subscribing to a car comes with its own set of advantages.
For instance, isn’t it true that driving a luxurious car is one of the inevitable desires of a car fanatic?

Through car subscription plans, car lovers can live this dream of driving the most luxurious cars without making a dent in their pockets. Plus, it is also a convenient mobility solution for people who often travel from one city to another for work assignments. To put it simply, car subscription models save them from transporting their vehicle every time they move to a new city thereby, providing an affordable and hassle-free mobility solution in the long-run.


Thus, taking cues from the aforementioned, it would be fair to mention that subscription-based models of owning cars are gradually gaining traction among consumers. Of late, the car rental industry has been witnessing a fundamental change in consumer behavior. The societal trend towards personalization/individualization has resulted in the rise of the so-called subscription economy and subscription models like Netflix, Amazon Prime, or Spotify, and in this case, car subscription plans are gaining new momentum.

At the same time, customers today demand an experience-rich service at an affordable price. Thus, looking at this drastically growing trend along with the fact that the global automobile rental and leasing market is expected to reach a valuation of $492.6 billion by 2025, it can be inferred that car subscription/leasing models will be transforming the existing ways of mobility in the years to come.

The article is authored by Sunil Gupta, MD & CEO, Avis India. All views are personal.

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first published:April 12, 2021, 13:59 IST
last updated:April 12, 2021, 13:59 IST