Buying an Used Car in Mumbai

Car Subscription Vs Car Buying Which Makes the Most Sense?

First, Hyundai and then Maruti Suzuki, car companies in India, are increasingly opening up to the concept of car subscriptions. Unlike leasing a vehicle, which often involves a third party, subscription-based models allow car manufacturers to contract out their cars directly. This has left many of us wondering about the advantages and disadvantages of Car Subscription Vs Car Buying. Which is better? Which should we choose?

The answer to this question depends on you. It depends on what kind of a person you are and what kind of car owner you would make. While subscriptions are better suited to people with a particular lifestyle, it doesn’t compare to the joy of owning a car for others. Here are specific scenarios to help you understand which might be a better idea for you:

If you move cities frequently, subscribe, don’t buy:

India has a large population of moving migrants. Students are completing their higher education away from their home town, working professionals with families in different cities, and people with transferable jobs.

Buying a new car for these people do not seem to make sense. In most states, you must register your vehicle with the RTO within a year of moving, and this might leave you having to pay the road tax more than once. The cost of transporting cars from city to city may also end up being too much if you find yourself moving frequently.

The car subscription model allows you to take up a contract, keeping in mind the period of your stay in a particular city. It will save you the hassle of having to sell off your car or getting it transported every time you move.

If you’ve been saving up to buy a family car, do not subscribe:

For many people in India, buying a family car is still an aspirational goal. Indians, especially the older population, tend to go for reliable and well-known models that have been around for a while and do not intend to resell the car as long as it meets the family requirements.

While you do not have to pay a downpayment may seem tempting, we recommend you not go in for the subscription model. If you have considered your family needs before choosing your car, it is also unlikely that you would have to change it in 2-4 years. Once the contract ends, you will have to either new the subscription or buy the car at market price. You may end up paying more this way in the long term since the subscription cost is relatively high.

If you’re into customisations, buy your car:

If what thrills you about getting a new car is the customisations you can do, the subscription model is not for you. While the subscription costs include maintenance and repair charges, all maintenance work has to be done by the OEMs. This means you have zero autonomy when it comes to customising your car.

If road trips are your thing, do not go in for a subscription:

Cars under the subscription model have two number plates, one commercial one private. This means toll will be higher for vehicles under the subscription model. If you’re in the habit of going on road trips frequently, subscriptions will prove costlier for you.

If you love the thrill of driving new cars, subscribe:

If it is the touch, the feel and the experience of driving a new vehicle that you find exciting. If you have to get your hands on the latest car models. Subscriptions are the right option for you.

If you want a cheaper option, do not go for a subscription:

This might sound a bit counterintuitive but bear with me. The subscription fee includes maintenance, repair, and insurance prices, and it has been set at a rate to offset the lack of road tax.

Let’s say you want to buy a Maruti Suzuki Swift Lxi; the on-road price will be around 5.5 lakhs. However, if you go for a subscription plan, you’ll end up paying a monthly fee of Rs 15,496, which adds up to over seven lakhs in 4 years. The subscription does not prove cheaper in the long term.

If you want to avoid a down payment, the subscription makes sense:

While the subscription doesn’t prove cheaper in the long term, it may prove more suitable if you want to skip paying a lumpsum amount together. The subscription model allows you to drive home with a new car as long as the monthly fees are paid.

If you want to simplify the process of getting a car, go for a subscription:

Buying a car comes with loads of paperwork, insurances to apply for and loans to pay. The subscription model simplifies all of this with an all-inclusive monthly subscription rate.

When you want to buy the perfect car for yourself, subscribe:

Subscriptions allow you to try out a car and see if it works for you. If you are not sure about purchasing a car model, you may be into it. A short time subscription would be ideal for you.

If you only want a car for a couple of months, do not go for a subscription:

So far, only midterm subscriptions have been made available in India. Only go in for a subscription if you want to avail of the service for more than a year. Otherwise, it may be good to check out other services such as leasing offered by third-party companies.

Maruti Suzuki ARENA offers Swift, Dzire, Vitara Brezza, Ertiga for subscriptions in 8 cities NEXA allows customers to get Baleno, Ciaz, and XL6 on subscription. Currently, only brand new cars are available on this payment model. We predict subscription costs will decrease as the companies have to offer used cars on subscription in a few years.