You Can Now Get a Car ‘Subscription’ Instead of Buying or Leasing. Should You?
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Drivers who want access to a car for a while, but prefer not to buy one, face a less-than-ideal choice: Take out a pricey month-by-month rental deal or sign a car lease that locks them in for longer than they may want. Now car "subscriptions" are offering a third way to get wheels.
A car subscription promises to be more affordable than a long-term rental and more flexible than a lease. The subscription period can be as short as a month or as long as several years. (Most often, it's somewhere in between.) Other pluses for consumers include being able to switch cars — or stop the subscription — as their needs change, and the convenience of not having to shop for auto insurance, which is bundled into the price.
The tradeoff, though, is likely to be that price. While a car subscription should be cheaper than renting a car, most such arrangements cost significantly more than a lease. And that's after you factor in the bundled extras -- which also include the costs for maintenance, registration, taxes and licensing.
Does it make sense to "subscribe" to a car instead of buying or leasing it? The answer may depend on how much you're prepared to pay for flexibility in your automotive needs, and how long you'll want to use the vehicle.
Here's more on the pros and cons of a car subscription. We also look down the road at where experts say this emerging option may be going. If subscribing isn't right for you now, it might have appeal later, as competition increases, subscriptions evolve and your car needs change.
Subscriptions are mostly offered by startups
The concept of a car subscription isn’t new. Major automakers pursued the business model in the U.S. several years ago, with limited success. Now, though, a number of third-party companies are amassing fleets and selling subscriptions to drivers through apps and websites.
Some of the new subscription providers are imports. Two of the companies expanding in the U.S., SIXT and FINN, originate in Germany, where the car subscription business model has gained some traction.
