What Are Car Subscriptions And Are They That Great in 2021?

Car subscriptions are new and If you’re like the average American, at one point or another you’ll do anything to get out of taking your car to the shop. The cost of maintenance can be overwhelming (and rarely convenient), not to mention that most dealerships will try their best to convince you it’s time for a new car before you’ve even finished paying off the last one!

Yes, service departments have come a long way in recent years, with some offering shuttle services and scheduled drop-offs so that customers never have to actually go there themselves. But nothing is quite as convenient—or affordable—as doing everything online without any automotive dealership involved. These are called “car subscription” services, and they’re more popular than ever.

But what exactly are car subscriptions? How do they work, and why should you get one if you drive a lot? And how much money can you save? Here’s our guide to the basics.

What Are Car Subscriptions?

Car subscriptions are like traditional leases or car loans, except there’s no middleman. They let you drive brand new cars for a set monthly fee, usually done by taking over the payments of an existing lease. You’ll never owe more than that monthly rate, and your contract will always be up at the end of each billing cycle (usually every 3 months).

One big difference between this approach and other types of car financing is that you’re not required to make any down payment; instead, these programs only require you to pay your first month’s bill before getting behind the wheel. That also means there’s no risk of losing money if you total your vehicle or it gets stolen within those initial months.

What To Look For

Before signing  on the dotted line, make sure you’re clear on these main points:

Length: How long will your car subscription last? Some are as short as 3 months, but it’s best to go for 6 or 12 months so your bill is easier to manage.

Price Per Month: Make sure it’s affordable compared to what else is out there. Remember that most programs require you to hand over a down payment when signing up, though some will refund whatever money you haven’t used after hitting an agreed-upon mileage limit.

Miles Per Year: You’ll have to put at least 12,000 miles per year on the vehicle if enrolled in most programs, versus unlimited mileage with leases and loans.

Insurance: Covers everything from fire damage and theft to accidents caused by you or other drivers on the road.

Who’s Allowed To Drive: The vehicle will be registered under your name unless otherwise noted. In some cases, it can even be used as a second car for visitors and guests within certain time frames.

If you understand these basics, then going that extra mile shouldn’t be too hard!

Should You Get A Car Subscription?

Car subscriptions are perfect for the following types of drivers:

Newbies who aren’t sure what they want yet. If you’re itching to get your hands on a new car, but don’t know if it’s worth paying extra money each month, then this lets you hit the road without worrying about price.

Is out-of-state travel important? As long as you’re willing to put in the time and mileage, this could be helpful when visiting family members or friends who live far away—especially since few dealerships allow test drives before signing up.

Drivers who don’t want to worry about resale values. Remember that the car’s residual value is part of what you’re paying each month, so there’s no need to factor in depreciation at all.

People for whom monthly payments are set up through their employer or university. Some companies offer employees discounted deals on car subscriptions, which can be a great perk.

Car Subscription vs Traditional Financing

Traditional leases and loans are different from subscriptions because they usually require putting down money before driving off the lot, as well as giving you more leeway with mileage limits. That said, your options tend to vary if you have less than stellar credit or an older vehicle :

If You Have The Credit: You’ll likely qualify for lower rates and a longer repayment schedule.

If You Have A Vehicle That’s 2 – 8 Years Old: These programs will usually let you trade-in your car as a down payment toward a different ride, which could be more cost-effective than owning it for the next few years.

Remember that no one type of financing is right for everyone, so listen to what your needs are before making any decisions!