What is a Car Subscription Service?
In the international car sphere, there has been an influx of car subscription services by leading car brands. But what exactly is a car subscription service? It is mainly a flexible and commitment-free alternative to vehicle ownership, leases, and car loans. You can pay a subscription fee to ‘own’ that car for a particular period of time. By simply cancel the subscription service when you don’t want it just like Netflix.
Generally, a car subscription service offers an all-inclusive plan that covers insurance, taxing, maintenance and services charges, and the overall cost of the vehicle. Companies or individual car subscribers just pay for the fuel and the subscription fee. The subscription fee can be paid monthly or yearly depending upon the company you are getting your car from.
In most cases, you can cancel your membership with just one-month notice. Move on to the next shiny model without any commitment.
Car Loan/ Lease Vs Car Subscription Service
The market for new and used cars in Pakistan for sale is very massive and the prospect of not owning a car even after paying for it may seem outrageous to many.
Why not get the lease or bank car loan and get permanent ownership of the car after the lease period ends? This model is not designed for those people who are thinking long-term when they get a car. This is a niche service and they are specially curated for those who want to avoid the responsibility of owning a car and want to swap it with a newer model every few months.
Car Subscription Services Available Now
Many big car brands offer a car subscription service. Some of them include Care by Volvo (Volvo), Pivotal by Jaguar Land Rover (Jaguar Land Rover), Genesis Spectrum (Genesis), Nissan Switch (Nissan), and Porsche Drive – Subscription (Porsche).
This curated service is launched by big-name brands yet most of them have jumped on this car swapping bandwagon. Not many budget brand cars have entered into this realm. But it will be interesting to see the launch of such a service by them.
Pros and Cons of a Car Subscription Service
Car subscription services don’t come with any hefty and complicated long-term contracts. And can opt-out of them with mere notice without any penalty or fees. New or used cars in Pakistan for sale usually require a down payment and this service lets you have a car without the hassle. You can simply upgrade to a different car when you feel like it. Without the chaos of selling your old car.
The main disadvantage of a car subscription service is the fact that you want to be the proud and sole owner of the car even after you’ve paid for its use. Subscription services like these will cost about 28 percent to 102 percent more per month than the cost of leasing, insuring, and maintaining an equivalent car. Moreover, you can’t make any modifications to the vehicle you’ve paid for even it is under you.
Therefore, these services are made for the uber-rich who have unlimited funds and they might indulge in this novel scheme owning to the ennui in their lives.
Will it Ever Work?
Car subscription service is a niche market and its success in Pakistan depends upon the demographic it is targeted towards. A middle-class salaried person will never opt for a service like this owing to the fact. That buying a car is like an investment for him. That will pay him off in the long haul. The market that comprises of used cars for sale is always thriving and if he makes a smart purchase, he can get a good resale value.
However, someone belonging to the upper strata of society who likes to change his car every few months just for the hang of it might get this service. Similarly, ex-pats and foreigners who are here on business might subscribe to this car service as it will be convenient for them.
In conclusion, this niche service might become very popular among a select few. But it will remain confusing, daunting, and unnecessary for the masses.
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