Car Lease vs Rental vs Subscription
Buying a car is often the second largest investment someone will make, and unlike a house, vehicles are a depreciating asset. With changes in technology, the economy and consumers' needs and wants, some people are looking for an alternative to buying a car. Car subscription services are different from renting or leasing, they’re a month-to-month, all-inclusive alternative to car ownership. Let’s discover if a subscription might be the solution for you.
Car Lease vs Subscription
The basic principle of a car subscription and lease are similar in that you pay monthly to use a vehicle, and at the end of the tenure, you don’t own the car (with a lease you may have the option to buy). Leasing ties you into a longer term contract, usually 24 to 48 months, whereas a subscription allows you to choose how long you use the car which could be 1 month, 6 months, or longer. If you end your car lease agreement prematurely, you’ll likely have to pay a penalty, but with a car subscription, you simply cancel the plan just like you would Netflix when you no longer need it.
A car subscription is a lot easier to set up than a car lease or finance agreement, they don't require a credit check and can be done conveniently online. Unless you opt for a higher monthly payment, a lease will require a hefty upfront payment, and a subscription comes with a one time joining fee. Both car leases and subscriptions have mileage caps which can be extended for an up-charge and other agreement stipulations such as smoking, pets, additional drivers, etc.
In many cases your car subscription will give you access to a selection of vehicles, in contrast a car lease will restrict you to just the one car. A lease really only includes the car, and will require you to purchase full-coverage insurance and pay for some maintenance, while a subscription includes all of those costs and benefits in your monthly fee that can be paused and resumed as needed. There tends to be a marginal cost difference between leases and a subscription. Car subscriptions are all about convenience, which is likely worth the extra cost.
Car Rental vs Subscription
The main difference between a car subscription and traditional rental is the duration. Car rentals are usually short term, sometimes with the option to rent for a longer period, whereas subscription services are designed to carry on for as long as you need them and are available with a fixed monthly price. Because they are designed for short term use, rentals tend to be much more expensive if you opt for a longer rental period and have fluctuating fees.
With a car subscription, you have much more control over the type of vehicle you get to drive while a rental agreement might say something like a “Ford Focus or similar car”. A subscription will detail the exact make, model and color and may also allow you to switch between different models. Car subscriptions are orchestrated entirely online and will arrive/be picked up versus having to coordinate dropping off and picking up a rental car yourself.
While both renting and subscription options have restrictions and limitations when it comes to pets, smoking, mileage, out of state/country travel, driving behavior and additional drivers, a car subscription service is the ultimate package for convenience and flexibility.
Need help deciding if a car subscription is right for you? Our team is always on hand to walk you through your options and answer questions. Get in touch with us today.
