The majority of car manufacturers in India are now offering a subscription model instead of buying a car outright. Hyundai was the first car manufacturer to offer this programme in March 2019 and it was followed by Maruti Suzuki, Toyota, Nissan, Mahindra and BMW.
Maruti Suzuki is currently offering 10 models across eight cities. The models include WagonR, S-Cross, Ignis, Swift, Dzire, Vitara Brezza, Ertiga, Baleno, Ciaz, and XL6. To expand its reach, it has signed up with three vehicle subscription partners - Orix, ALD Automotive and Myles.
Hyundai with the first-mover advantage is now present in 20 cities. They have a tie-up with Revv along with Mahindra to offer the subscription services. Other car subscription companies in India are Zoomcar, Zap Subscribe and MyChoice.
What is a car subscription service?
A customer can drive home a car of his choice by paying only for it on a monthly basis. There is a flexible tenure that he can opt for. The minimum period is 12 months and goes to 36 months and 48 months. The customer also has the option of extending the tenure, upgrading the car or even buying it at market price.
The subscriber has to be above 21, own a valid Indian driving license and an Aadhar card to avail service. The vehicles that are offered under the subscription model come with the relevant state permits and/or All India Tourist Permits.
A package deal
Under the subscription service programme, all a customer does is pay the monthly subscription fee. In turn, he gets insurance, maintenance, and roadside assistance as a part of the package at no extra cost till the completion of the tenure.
A customer has the choice of a white or black number plate. Under the white number plate, the subscriber registers the car in his/her name and is hypothecated to the leasing company. Under the black number plate model, the leasing company registers it in its name.
With no ownership and no extra cost of down payment, EMI, registration costs, monthly maintenance, insurance fee and roadside assistance charges, the programme works out far beneficial in the long run for the subscriber as the leasing company is responsible for all these services.
However, it does not come cheap. To cite an example, an option for a midsize car will cost the subscriber Rs 13,000 approximately (all-inclusive) for a 48-month tenure (depending on the city).
The list of advantages has already been pointed out. What is more alluring is the fact that you don’t actually own the car but you drive it as if you own it. It is advantageous for a person who has a transferable job. The hassles of selling the car or processing the paperwork with the bank, getting the transfer documents from the authorities, transporting the car etc., are quite cumbersome and tiring too.
(Edited by : Aditi Gautam)
First Published: IST