Car lease or car subscription? Which service would you opt for? In order to make the right decision, you must know the difference between the two. Earlier, people used to lease cars, but now subscription is also a potential option.
The two car financing options have given people the option to use their favourite cars without spending much out-of-pocket.
In general, car subscription works similarly to any other subscription services such as Spotify, Netflix, Gym, etc., but it’s different from car leasing. With the rapid growth of the subscription economy, the popularity of car subscription services has grown rapidly.
Subscription is certainly a new way to pay for the vehicle without putting a hole into your pocket. Your monthly car subscription payments are likely to include the cost of the car. In addition, it includes tax, insurance, breakdown cover, and maintenance charges.
With so many attributes, the car subscription mode of buying a car for the short term is easy, convenient, and flexible. Drivers can easily customize their subscription plans via dedicated apps. In addition, several plans also include roadside assistance.
With a car subscription, you only have to think about a single payment each month. If the monthly payments are something easily affordable, even better. And if you are opting for an electric vehicle, you don’t even have to worry about fuel mileage or charges.
Leasing a car is a proven method of paying for a car to use for a set period of time via monthly payments. Car leasing is also termed a Personal Contract Hire (PCH) which gives a person access to a used or new car over an agreed period.
This contract usually ranges between 12 and 60 months or 1 and 5 years. However, you don’t have the option to buy the car at the end of the contractual period or you don’t own the car in any way. Leasing a car is generally less complicated than leasing.
Lease payments tend to be more affordable as it is less than monthly car subscription. The lease amount is decided considering several factors like vehicle sale price, duration of the lease, rental charges, mileage, and so on.
When the contract completes, you need to hand back the car keys to the lease company. It’s a feasible option for regular drivers who wish to change their vehicle frequently without having to deal with the sell-purchase chores.
Both the car financing options – car lease and car subscription give you the flexibility to use a new or second-hand car without paying the full amount upfront. This can be an optimal and smart way to temporarily own a vehicle while saving money.
The value of the new car depreciates the moment you drive it away from the dealership outlet. Car leases and car subscriptions tend to be helpful options for many people as they don’t have to worry about maintenance.
Even though you don’t usually get any extra features with the car lease method, it’s easy to pay off monthly charges. On the other hand, a car subscription is more pleasing due to the all-inclusive service model.