According to a report from Statista, which you can access here -- 59.6 million cars will be sold in 2020. Because of the pandemic, this is reflective of a significant decline compared to last year.
While many would like to own a car, not a lot are lucky to achieve the reality of their dreams. The cost of ownership and maintenance can be quite high. With this, you have two more economical alternatives – lease and subscription. While the two will let you have a car without buying one brand new, they are different. Keep on reading and learn more about their differences.
What is a Car Lease?
A car lease is similar to a rental, except that you will do it for a longer period. In most cases, the length of the lease will be 36 to 72 months depending on the agreement of the concerned parties.
The rules can vary from one company to another. However, in most situations, you will be settling a downpayment plus upfront monthly payments based on the agreed duration.
It is a great alternative to buying a brand-new car, especially because of the low monthly payments. This is an opportunity to have a car without high upfront costs. It is the most convenient option to have a car in the long run.
What is a Car Subscription?
A car subscription, on the other hand, allows a customer to pay a flat fee in exchange for using several cars. You will be paying an all-inclusive fee, which will include even repairs and insurance.
With a subscription, you can be driving different cars in different weeks. If you want to give this a shot, then check out bestcarsubscription.org for some options.
This is considered a great alternative to car leasing. The best thing is that the fees include everything, and hence, you can have peace of mind regarding its use.
A Look at the Differences
Deciding which one is best for your needs and preferences isn’t easy. You have to consider several factors. To help you make the right choice, below, we’ll talk about some of the notable differences between the two.
One of the biggest obstacles to car ownership is the downpayment. It can be a financial burden for most buyers. If you are leasing a car, you will have to pay a high initial amount. For some people, this could be a turn-off, especially those who do not have the money.
In most cases, you will not need to pay a large downpayment if you opt for a car subscription instead. However, in some situations, you will need to pay a security deposit. The good thing is that this is refundable once the duration of the subscription expires.
2. Length of Commitment
When you lease a car, you will typically have to enter into a long-term contract. This can run anywhere from three to five years. This means that you will be tied to the company leasing the vehicle for a long time.
For a more flexible arrangement, car subscriptions are great. Many of the companies providing subscription services will highlight how there is no long-term commitment necessary. It can be anywhere from one month to a year depending on the provider. With this, you can opt-out anytime without incurring a large penalty. This is great if flexibility is an important concern for you.
Anyone who has purchased a car before will know how frustrating the process can be. Especially when applying for financing, you have to submit a lot of documents. The same thing is true with leasing since it involves several years of service contract.
With a car subscription, you will also need to submit several documents. The good thing is that the process isn’t as tedious. It will take only a couple of hours before your application can finally be approved.
4. Car Choices
When you enter a car leasing contract, you will pick a car, and that is what you will be driving throughout the contract. If you want to change the car, then you will need to enter another leasing contract.
On the other hand, if you are under a car subscription model, you will have more choices. Before signing a contract, you will be presented with a list of all the car models that you can drive. For instance, you can be driving a sedan today, and the next week, you will be on an SUV.
In a car lease, you will incur a huge penalty when you change your car in the middle of the contract.
If you want to change your car without any penalty, then the subscription model will work for your needs.
6. Long-Term Costs
Owning a car requires a long-term perspective. If that’s the case, then between leasing and a subscription, the latter is the better option. As mentioned earlier, the down payment is inclusive of everything, such as insurance. When you return the car, when there are scratches and dents, among other minor problems, you do not need to pay for the repair.
One of the biggest drawbacks of leasing is that you will act as if it is your car. So, when there are repairs or when you get involved in an accident, you need to cover them from your money. You will pay lower for the lease, but if you consider all other incidental expenses, you might find that it isn’t as viable as it sounds.
So, which is a better option? This is one thing that only you can answer as it depends on your needs. If you are asking us, however, we would say that a car subscription is a better choice. This is more affordable and versatile. You won’t need to enter a long-term contract. The best thing is that you are free to change your car without incurring a penalty. You can drive a different car every week or month, depending on the terms agreed upon.