There is a shift in customer purchasing decisions. The emphasis has shifted from owning to experiencing, and this is precisely what car subscription provides.
Purchasing a car entails several factors, the most significant of which is a sizable down payment. To make a downpayment for a typical automobile and then begin the monthly EMIs, you’ll need between Rs 1 lakh and Rs 2 lakh, including periodic servicing, insurance renewals, and other expenditures. So, having a car is a tremendous challenge. Of course, you’d like to buy a car without dealing with so many complications, but is it even possible?
What exactly is a Car subscription service?
The subscription service allows a consumer to drive home a car in exchange for a monthly fee and complete access to the vehicle without putting down any money. Instead, subscribers must pay a monthly subscription that includes comprehensive maintenance, insurance, and roadside support.
Maruti announced its subscription service in September 2020, whereas Hyundai launched its car subscription programme in March 2019. Hyundai is now providing the plan in 20 locations. However, it was introduced throughout its complete model range in collaboration with Revv.
Maruti collaborated with Orix Auto Infrastructure Services India, a subsidiary of Japan-based Orix Corp, to roll out the subscription model in eight locations.
How does car subscription service function?
You have to sign up, pay a monthly fee, drive the car, and pay for gas. Like maintenance and insurance, all other expenditures will be covered by the leasing company and the OEM. The plan has tenure choices of 24, 36, and 48 months. When the car subscription tenure is completed, the user can choose to extend, upgrade the vehicle, or buy the automobile at market price.
The car subscription plan provides two licence plates. The first choice is a white number plate. The automobile is registered in the customer’s name and hypothecated to the leasing company. The second option is a black number plate, which means the car is registered in the leasing company’s name.
What happens to the automobile once it is returned to the leasing company?
According to industry sources, while the subscription system is now available for new automobiles after the cars are used and returned, they may be utilised for a used car subscription service, which will be significantly cheaper.
The answer to this question is entirely up to you, and it all depends on who you are and what sort of automobile owner you would be. While car subscriptions are better suited to those who have a specific lifestyle, they do not compare to the thrill of owning a car for others.
Automobile manufacturers in India, first Hyundai and later Maruti Suzuki, are more amenable to the notion of car subscriptions. In contrast to leasing, which frequently requires a third party, subscription-based models allow automobile manufacturers to contract out their vehicles directly. Many of us ask about the benefits and drawbacks of Car Subscription vs Car Buying. Which is superior? Which one should we go with?
Also Read, What Problems Indian Car Culture has? Does it Even has one?
Subscribe rather than buy if you regularly change cities.
India has a considerable number of migrant workers. Students continuing their higher education away from home, working professionals with families in distant places, and persons with transferrable employment are all completing their education away from home. Purchasing a new automobile does not appear to make sense for these folks. Most jurisdictions require you to register your car with the RTO within a year of relocating, which may necessitate paying the road tax more than once. If you frequently relocate, transferring automobiles from city to city may also become prohibitively expensive.
The car subscription concept allows you to sign a contract based on the length of your stay in a particular city. It will spare you the trouble of selling or relocating your automobile every time you move.
Do not subscribe if you have been saving for a family car.
Purchasing a family automobile remains an ambitious dream for many Indians. Indians, particularly the elderly, choose reliable and well-known models that have been around for a while and do not intend to sell the automobile as long as it satisfies the family’s needs.
While you do not have to pay a downpayment may be appealing, we urge that you avoid the car subscription model. If you chose your automobile with your family’s needs in mind, it is also improbable that you will need to replace it in 2-4 years. When the contract expires, you must renew the membership or purchase the automobile at market value. Because the membership cost is relatively expensive, you may spend more in the long run.
Buy your car if you enjoy customising it.
Suppose the ability to customise your new automobile is what excites you about purchasing one. In that case, the car subscription model is not for you. While subscription fees include maintenance and repair costs, the OEMs must perform all maintenance work. This implies you have no control over how your automobile is customised.
If you enjoy road trips, don’t get a subscription.
Subscription cars have two licence plates, one commercial and one private. This means that tolls for automobiles under the subscription model will be higher. Subscriptions will be more expensive if you often take road vacations.
Subscribe if you enjoy the thrill of driving new automobiles.
If you find the touch, feel, and experience of driving a new automobile exciting. Suppose you have to have the most recent automobile models. Car Subscriptions are the best choice for you.
If you want a less expensive choice, avoid subscriptions.
This may seem paradoxical but bear with me. The membership fee covers maintenance, repair, and insurance costs. It is set at a rate designed to compensate for the lack of road tax.
Assume you wish to purchase a Maruti Suzuki Swift Lxi; the on-road cost will be roughly 5.5 lakhs. However, if you choose a subscription plan, you’ll pay a monthly charge of Rs 15,496, which adds up to more than seven lakhs over four years. In the long run, the car subscription is not less expensive.
The subscription makes sense if you want to avoid making a down payment.
While the subscription isn’t necessarily cheaper in the long run, it may be more acceptable if you don’t want to pay a lump sum all at once. As long as the monthly expenses are paid, the subscription model allows you to drive home with a new automobile.
If you want to make buying a car more effortless, consider signing up for a subscription.
Purchasing a car entails paperwork, insurance applications, and loan payments. With an all-inclusive monthly membership charge, the subscription model simplifies everything.
Subscribe if you want to get the best automobile for yourself.
Car Subscriptions enable you to test drive an automobile to determine whether it is right for you. If you are undecided about acquiring a particular model, you may be interested. You’d be better off with a limited-time membership.
If you need a car for a few months, avoid subscriptions.
Only midterm car subscriptions have been made available in India thus far. Only purchase a subscription if you want to use the service for longer than a year. Otherwise, it may be worthwhile to investigate other options, such as leasing, provided by third-party firms.
Providers of car subscriptions in India
Three types of companies provide car subscription services:
- Dealerships
- Car Rental Firms
- Subscription Service Providers
The following are the existing car subscription providers in India:
- Revv Open provides subscriptions for various Hyundai and Mahindra automobiles, including brand new and unboxed vehicles. An All India Tourist Permit is included in the contracts.
- Zoomcar Zap Subscription: Zoomcar Zap has subscriptions ranging from one to 24 months. There is also the opportunity to buy the vehicle after the term and a car-sharing service for part-time customers.
- Mahindra Subscription: Mahindra Subscription focuses solely on brand-new vehicles, with lengthier subscription offers beginning one year. This service is provided by the firm using Revv’s Open subscription service.
- Sixt: Myles Zero with multiple car packages and 6-month contracts, Zero primarily targets the business subscription market.
- Hyundai Subscription: Hyundai Subscription is a service supplied directly by Hyundai that allows you to subscribe to their automobiles monthly or annually. There is also the option to subscribe exclusively for weekdays. The service provides access to brand-new or unboxed (less than two years old) vehicles, with Hyundai utilising Revv to list and manage their inventory.
- MyChoize: My Choize provides 25 automobiles throughout India’s biggest cities, but with as little as 24 hours. With their membership contracts, MyChoize also gives unlimited mileage.
- Nissan Intelligent Ownership: Nissan Intelligent Ownership is a Nissan subscription service with periods ranging from two to four years. Customers can buy their Nissan automobiles after their contracts expire.
- Maruti Suzuki: Maruti Suzuki provides 6-monthly incremental car subscriptions with a 12-month minimum sign-up time and a 4-year maximum term. Customers can purchase their automobiles at the end of their contracts.
- Toyota India: Toyota India offers 6-monthly incremental car subscriptions with a 12-month minimum sign-up duration and a 48-month maximum term. Customers can pick between 15,000 and 18,000 kilometres per year as their annual mileage allotment.
- MG Subscribe: MG Subscribe offers subscriptions in collaboration with Myles Zero, with 6-month minimum terms and the possibility to sign up for a combined plan with another client if you are both part-time users.
Also Read, Sedan vs SUV: Which should be your Next Car
How is it Affected by COVID-19 Pandemic?
In layman’s terms, a car subscription service provides a service where a client only needs to pay an all-inclusive monthly cost that covers all charges. As a result, consumers can possess a pre-owned or new automobile of their choosing for 6 to 60 months without incurring any additional costs such as insurance, maintenance, and so on. Furthermore, customers may easily subscribe to a new model after their car subscription plan expires.
Key businesses in this market also offer personal car subscription programmes that provide clients with mobility freedom. All automobiles are provided with the strictest safety precautions, and brands are sanitising rigorously and using contactless delivery. They give cars equipped with technologically advanced amenities to deliver the most pleasing mobility experience possible.
The goal is to make personalised car subscriptions a more viable and hassle-free alternative to car purchases in the following years while also giving consumers instant ownership. It’s worth noting that India’s automobile rental business has expanded dramatically in recent years. In addition, the worldwide user base is expected to reach 77.5 million by 2025.
