Buying A Car Vs. Car Subscription – Which Is Better?

A decision regarding buying a car vs. car subscription will depend on usage needs, your budget and long-term goals

When planning for a car, one can go for a full purchase or choose a subscription option. Many carmakers in India have the subscription option readily available for their popular models. If you are confused about buying a car or choosing a subscription plan, here are some important things to consider.

Upfront cost  – Most people prefer car loans when buying a car. But even then, one has to pay around 20% down payment. Even if you are buying an entry-level car, the down payment amount is likely to be more than Rs 1 lakh. In that case, it is apparent that you have to use your savings. In comparison, choosing a subscription plan does not require you to make a large down payment. In most cases, you will only need to pay a refundable deposit and a monthly fee.

Running costs – Fuel expenses will come from your pocket in both cases. But if you buy a car, you will also have to pay insurance, maintenance and roadside assistance from your own pocket. In comparison, such expenses are included in the monthly fee of your subscription plan. In this context, a subscription plan can protect you from huge expenses.

Customizations and upgrades – If you like to personalize your car, you will feel more at ease when you have made a full purchase. You can freely carry out any minor or major customizations to your car. But in the case of a car subscription, you always have to be extra careful. Because there may be a risk of breaking the terms and conditions of the subscription plan.

Commitment vs. Flexibility – When you buy a car, you are essentially tied to it unless you sell it. But selling a car has its own hassles such as finding the right buyer, getting the right resale value, organizing documents, etc. In comparison, a car subscription frees you from such hassles. You can easily switch cars after the end of the subscription plan.

Long-term value – As a car ages, its value decreases via depreciation. But even then, you can still get some amount of resale value. In comparison, a car subscription plan is a pure expense. You will not be getting any amount in the form of resale value.

Lifestyle choices – For people with a fixed address, buying a car can be beneficial in several different ways. For example, there will not be any limit to the number of miles that can be covered. In comparison, a car subscription plan will be hugely beneficial for people with transferable jobs. A subscription plan will also benefit people who prefer to try new things often.

As is evident from above points, both buying a car and a car subscription have their respective pros and cons. You can decide based on your specific needs and preferences.