Want to know everything about the subscription car? So you are in the right place. In today’s article, I will explain how it works, the prices, advantages, and disadvantages of this new way of hiring a vehicle.
You’ve probably heard of subscription cars, a trend that has been growing and becoming increasingly popular. Both here in Brazil and abroad, this option has been seen more often.
A study by SimilarWeb, a market intelligence consultancy, showed that in 2021 (between January and May), searches for this term increased on the internet, with a total of 91,500. This growth, compared to 2020, was 457.9%.
This reality shows that many people have been interested in knowing more about the subject. But is it really worth it?
Still without insurance for your car?
What are the pros and cons of this decision? Check it out below.
What is a subscription car and how does it work?
The subscription car service is a way to hire a vehicle in the model and conditions that the consumer chooses, paying a monthly or annual fee.
Its operation is simple, being like subscribing to an internet plan, only in this case you will have a car as a service/product. This car will not be yours, but it can be used for as long as you pay this kind of monthly fee to be entitled to it.
With high prices and the lack of inputs for car production, in the time of a pandemic, many people began to opt for this possibility, with a subscription car plan, the person does not need to enter the financing of a vehicle.
However, not everything is so uncomplicated. Although it is a way out for those who do not want to buy a car at the moment, it is necessary to evaluate in the long term whether the alternative is worth it or not for those who decide on it. We will explain further below!
Prices increase according to the car model, plan, and franchise chose. According to a survey carried out by CNN, the cost of a subscription in Brazil varies between R$ 869/month, the price of the Renault Kwid with a monthly franchise of 500 kilometers and a 20-month contract can reach up to R$ 3,369/month for a Corolla in the package. with 24 months of contract and 1,000 kilometers of the monthly franchise.
Remember to research well to find a car that fits your budget.
What are the advantages?
Having a subscription car is becoming more common in the country and in the world because of some benefits it offers.
It should be noted that, often, these positive points respond well to a moment that the person is going through. It may even be that in the future she wants to have her own car, but there are situations in which this measure may be appropriate for the period she spends.
Using a vehicle in this modality is having an on-demand service, which attracts some types of consumers, who think about practicality. Follow to understand.
Enjoy a brand new car
If you opt for a subscription car, one of the first advantages will be enjoying a brand new car. The comfort and safety provided by such a vehicle are great attractions.
In everyday life, depending on the car you have, problems and impasses with steering, head gasket burning or even air conditioning can appear and no one has much patience or time to deal with these setbacks.
But being attentive and arranging for repairs is necessary (remembering that this is much easier when you have the assistance of good insurance ).
With the subscription car, the concern with maintenance is less and this specifically attracts those looking for practicality.
Easy and fast approval
In general, hiring a car by subscription is simple and fast.
Basically, documentation such as a driver’s license (CNH) is required and in some cases a brief income analysis. For safety, some companies prefer that the monthly fee does not exceed 30% of the person’s income. But this is not a rule and it all depends on what is negotiated and on each plan and case.
Approval is usually quick and for those who are in a hurry to have a vehicle and also don’t want to buy one right away, you can see a solution in this way.
No resale headaches
Another concern people have when purchasing a car can be reselling it later. When exchanging, finding a good buyer, being able to negotiate a fair price, and not losing money can be reasons for great anxiety for the owner.
With the subscription car, this headache does not exist. When you want to change vehicles in use, just hire another plan.
In any case, however, it is worth mentioning that adopting some measures to protect the vehicle is always advised, such as protecting it from the sun, rain, and hail and avoiding collisions (crashes). This prevents wear and tear and keeps it for a long time. Such caution is essential for hired cars as well.
What are the disadvantages?
Now that you understand what can attract consumers to the subscription car market, let’s address what the downsides are.
Explaining both is very important because only then is it possible to analyze case by case what is more worthwhile.
See what can be considered a negative factor in the choice:
Modifications are prohibited
When a person uses a subscription car, he cannot change anything about it. If the individual wishes to change parts in the engine or structure, it is prohibited.
So whoever wants to customize a vehicle or rev it up, won’t be able to. Everything comes under contract and the vehicle needs to be maintained and returned as picked up.
Especially in situations where one has a desire to customize wheels and sound systems, this can be a hindrance. In general, the car tends to fulfill the role of functionality.
Anyone who wants to customize, in addition to observing the legislation and guidelines of the Detran, has to consult the contract or purchase their own vehicle.
No lending to third parties
Another factor that can put this choice at a disadvantage is the impossibility of lending the car to someone.
When you have a vehicle, it is natural that there is the freedom to eventually release the keys to a person you trust to drive it. Or, in more specific cases, count on the protection of insurance for an additional driver and thus be more relaxed.
Already with the car by subscription is not so simple.
If the existence of other drivers is not expressly provided for in the contract, which can also affect the value, it is not possible to do so. So, in the contract, these people must be indicated. And it’s not always possible to predict who will need to use our car, is it?
the car is not yours
Finally, but of paramount importance to reflect on: a car by signature is not yours, no matter how much it generates that feeling.
It is a service that you pay to have, but not an investment, nor an acquired good, which in the long run helps build wealth. For some people, the fact that it is not an advantageous asset because it removes the responsibilities with IPVA and licensing. All this is already included in the plan. But, on the other hand, this reality is reflected in rights. No matter how much you spend on monthly fees, the car will never be yours. In a loan, even with interest, one day it becomes your property.
After all, is a subscription car worth it?
As can be seen, the trend of increasing interest in this service in Brazil has also been highlighted.
But in the end, it all depends.
After understanding these pros and cons, the answer to the question of whether a subscription car is worth it is up to each person, according to their needs and expectations.
There is no definitive answer, as each context, in particular, must be analyzed in order to define what is best for each case.
Tips that can help you decide
1- Check your current financial condition
Opting for a subscription car at the moment can be good from the point of view of those who don’t have the money to pay for a vehicle, but on the other hand, it requires certain financial stability to pay the monthly fee.
If this is not your moment, saving money and trying to acquire your own vehicle in the future may be the best option.
2- Analyze your need and frequency of car use
Think about how often you use the car.
If it’s sporadic, it may not be worth having a subscription car, where you pay for the whole month. In that case, renting a car once in a while or having your own vehicle can pay off more.
Also, understand if, on a daily basis, you will need to let others drive the car.
3- Imagine your long-term plans
Analyze: Are you using the car to cover a momentary need, such as a temporary job? Or do you intend to have the car for continuous use?
Think about what you want in the long run to understand if it’s worth signing up now or paying for a car that will be yours in the future.
4-Understand your particularities and tastes
Analyze your profile and identify if you are indifferent to some details of the vehicle or if you would like to have your own style in it. If personalization is important to you, a subscription car may not suit you well.
5- Do the math
To establish a good cost-benefit ratio, see how much you can and are willing to invest in a service or a vehicle of your own. This will also depend on each person’s standard of living.
Avoid headaches: quote your insurance
More than protecting your car with maintenance and revisions, taking out Geico auto insurance is essential to ensure that it is covered in the most diverse situations.