Consumer Insights

What is the difference between car subscription and leasing?

April 12, 2023
8 min read
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In today’s fast-paced world, almost everyone needs a car to get around.

Public commutes can be difficult and time-consuming and having a vehicle is important for people to have in order to get places. That being said, many young adults don’t have the means to purchase a car fresh into their careers and are looking for ways to avoid huge down payments, insurance as well as other vehicle-related expenses such as repairs, services, maintenance and registration. This is one of the many reasons why a lot of consumers today are unwilling to purchase a car outright.

Concepts like car subscriptions and leasing are becoming more and more popular every day. It allows people to have the convenience of a car without the responsibility of owning one. Leasing and subscription both offer consumers access to vehicles without the commitment of purchasing one. You get freedom from a lot of the responsibilities that come with car ownership. But between car leasing and subscription, which one is the right choice for you as a consumer, and how do these two differ in terms of what they have to offer?

What is car subscription?

- Great for short-term subscriptions

- Flexible and convenient

- Budget-friendly monthly pay options

- All-inclusive fees and freedom from vehicle ownership responsibilities

- The choice between a fleet of different cars

Nowadays, with car subscription being an option in most parts of the world, you can subscribe to a vehicle of your choice for as long as you require it. Car subscription works on a monthly basis. You pay an all-inclusive fee to the car subscription company, and you get the comfort of having a car in your garage to help you get around. This all-inclusive fee includes all your car-related expenses such as service and maintenance, registration, repairs, or insurance. You usually only need to pay for refuelling (unless you opt for an electric vehicle). You can choose a set period of time that you would like to have your subscription going, or you can continually extend your subscription period every month. This allows people to be more flexible with the duration of time that they need the car. You can also change or upgrade your car if you want at the tap of a button. Car subscription has many advantages, but most of it comes down to the convenience that it offers.

Most car subscription companies have a customer support portal in place, which means that if there are ever any issues with the car itself, or if you want to return or exchange your car, as well as have it serviced or repaired, you can do so easily by contacting the customer support and arranging a suitable time for you to have the car picked up or dropped off. The fact that you avoid having to visit a dealership, service centre or office for any of your car-related needs is also very appealing to many consumers. Drivers can customize their tenure period and choice of car all using a simple app on their computers or phones.

You can choose between all the different cars that the car subscription company offers, which can make having an expensive car more accessible and affordable. You can also change your car easily which is great for people who are always looking to upgrade their car as newer models come into the market.

There are some downfalls to consider (disadvantages of car subscription) before you go for a subscription model. Subscription cars usually have a commercial license plate which can take away the “personalized” feeling you get when you own a car. You also can’t make any temporary or permanent modifications to the car while you’re using it, so you have to ensure that you subscribe to a car that meets all your needs. Most car subscription services also require you to pay a damage fee that is usually refundable at the time of return, but any damage to the car itself can end up costing you money out of that fee. Car subscription services also usually have a mileage cap, and any additional miles you do can be chargeable which makes it unsuitable for long journeys and long-term subscription periods.

This makes car subscriptions great for consumers who only require a car for short durations and need more flexibility, such as people who travel a lot from one place to another. This allows them the option to subscribe to a new car wherever they go, only for the duration of their need. You end up avoiding all of the responsibilities of owning a car but avail all the benefits at a much more reasonable flat all-inclusive monthly fee.

What is car leasing?

While a car subscription is great for people looking to have a vehicle for short durations, leasing can be helpful to people who want to have that car for a longer period and for longer journeys but still want to avoid the responsibility and expenses of owning a car.

- Suitable for yearly rentals

- Budget-friendly

- A more personalised experience

- A commitment of 2-4 years

- A limited number of cars to choose from

Leasing a car is also a budget-friendly way of having a car to help with your day-to-day commute. You avoid the initial down payment but still get the more personalised experience of having a car in comparison to car subscription. Leasing is often seen as the short-term alternative to buying a car and has been around for a while. Consumers usually commit to at least 2-3 years of leasing. You may have to pay for servicing, insurance and maintenance while you’re leasing a particular car (depending on your lease agreement) but you do usually get a much better value compared to buying a car.

When you take a lease on a car, you’re essentially agreeing to a long-term rental from a dealership or service. This means that the duration of your lease is decided beforehand. Paying a lease for a car does tend to be less than the monthly instalments you might have to pay for a purchased vehicle.

Leasing a car usually involves a lease contract. This contract or agreement strictly states the duration of your lease, how many miles you’re allowed to drive, and any expenses you need to pay during your lease such as full-coverage insurance and regular service appointments. This lease contract is a legally binding agreement and it’s important to read it carefully to ensure that it’s drawn according to the terms decided by both parties involved.

You do, however, get a more personalised vehicle experience in comparison to car subscription. You’re free to take your car for any repairs that you may require and don’t have to pay an exorbitant damage waiver on it. Another thing to note is that while subscription is a fairly new way of gaining access to a car, leasing has been around for a while. This means that while car subscriptions may not be available in certain parts of the world, the option of leasing is more easily accessible to consumers.

Car subscription vs leasing - Which one is better?

The answer to this question depends entirely on the consumer. If you’re looking for a short term budget-friendly alternative to buying a car that offers you minimal vehicle responsibility, more flexibility in terms of your duration of need and your choice of vehicle, ease and convenience in terms of how easy it is to subscribe to a car through an app and the support that you get including car pick-ups and drop-offs, car subscription is the way to go.

If you’re looking for a slightly longer tenure and yearly rentals on a car, leasing may be more suitable for you. It offers you a more personalised experience that is also budget-friendly. You do have to pay some vehicle-related expenses during your lease period but most dealerships are open to making your lease agreement one that is more suited to your requirements.

Finally, if you want the car for a longer duration, as well as a fully personal experience where you’re open to making any modifications to your vehicle, take it anywhere you like without a mileage cap, and you have the money for a down payment on a used or a new car, purchasing a car might be the best bet.

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Joe Capocci
Senior Marketing Specialist

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