From meal kits to streaming to restaurant loyalty programs, subscription services are on the rise. So why not car subscriptions, too? The car subscription market is expected to surpass $15.56 billion by 2030, as drivers continue to take advantage of this new, flexible way to access a vehicle.
Curious to learn more? Read on for the big FAQs about car subscription services.
How Does It Work?
Most car subscription services start by asking users to sign up online. Prepare to provide your driver’s license information and a credit card number. After that, you can usually download an app which walks you through the process of reserving and using a car. Some services offer door-to-door vehicle delivery and pickup, while others let drivers unlock and rent nearby cars from a variety of neighborhood pickup points.
Is a Car Subscription the Same as Leasing?
Car subscription models generally offer more flexibility than a lease. Many subscription users keep their car for only a short amount of time, return it, and re-rent as needed; whereas with a lease, you’re paying for full-time use of the vehicle. Then again, more and more car makers are launching car subscription services which look a lot like leases—a great option for drivers who want to enjoy a variety of vehicles on one plan.
What Are the Benefits?
One major benefit of car subscription services is the opportunity to save money! Some users are able to completely eliminate the need to own a car, which means less spending on insurance, repairs and general vehicle upkeep. Then again, some car subscription users still have an everyday personal vehicle—but they use their subscription to try out luxury models or to access electric vehicles and save gas during longer trips. Car subscription services also mean you can switch vehicles based on the season; enjoying an SUV in the winter and a convertible in the summer, for example.
How Much Can You Save?
When it comes to saving and spending with a car subscription model, it’s all about your priorities. Choosing a top-tier subscription service with a luxury automaker might not benefit your bank account—but if you opt to sell your vehicle and rely on a subscription alone, you could save some big bucks. Forgoing a vehicle for even a few days a week might encourage you to use alternate forms of transportation, meaning less spending on gas. Plus, a car is a depreciating asset; so if you sell your car and invest those funds, your money will be appreciating instead.
Are There Any Drawbacks?
Before getting started with any car subscription service, be sure to read the fine print about monthly fees, insurance fees, mileage limits, and what costs you’re responsible for if an accident occurs. Some services also charge for excess wear, so it’s important to check up on what’s expected of you as the driver. Beyond the financial considerations, there’s the fact that with a subscription service, you never really own the car. If having a vehicle you can call your own is a priority, or if you don’t want the hassle of receiving and returning cars, vehicle subscription is probably not the way to go.
What Does It Mean for My Loan?
So: you’ve decided that you’re ready to sell your car and utilize a car subscription service instead. But what if you still owe money on your car loan? In that case, your lender technically owns part of your vehicle, so you’ll need to take a few extra steps in order to sell it. Start by speaking with your lender. They can explain what steps to take for the sale of your car. Depending on its value, you might be able to pay off the entire loan—but if not, you’ll need to budget for continued loan payments. Check in with a loan officer for more information on the process and particulars.