Subscribe or Lease? Which one is right for you?
So you’re in the market for a car, but you’re not interested in forking over the gobs of cash upfront to buy one. The obvious choice is to lease, right? But leasing a car comes with all of its own frustrations as well. If only there were some alternative to both owning and leasing, something that might better suit your needs and takes advantage of the benefits of the modern, digital age. Meet the car subscription service.
Intended to fill a market gap between leasing and car-sharing, car subscription services aim to package the individual costs that come with leasing a car into a single, transparent monthly fee. Of course, being a new industry, everyone’s still figuring out what works best – and that means that some subscription services are definitely better than others.
Some services offer access to multiple cars for one monthly fee, others have unique monthly fees for each individual car. Some include all the extra costs of leasing – even insurance – while others only cover a few. Yet, regardless whose service is better or best, the fact is that more and more people all over the world are choosing to use car subscription services.
What’s the difference?
First, let’s talk about what leases or subscriptions each are. The modern car lease was a sales strategy to give average consumers a means by which to essentially “rent” the newest, coolest cars, when they probably won’t be able to afford the cost of buying them. This benefited both the consumer and the dealer; while the consumer won’t necessarily own their new dream car, they’ll get to rent it for years at a time. For dealers, they get to make money off of inventory that might have otherwise only been available to a much smaller group of consumers.
So, how does it work? When you lease a car, what you’re paying for is the cost of the car’s depreciation during the agreed upon lease term. As you probably know, the minute a car leaves the lot, its value begins to decrease. Say you’re buying a new car for $40,000. After a few years it’s expected value is estimated to be around $25,000. This means that over a three year lease, you’ll be paying that $15,000 difference. Of course, it’s more complicated than that – there are a slew of extra costs like interest, insurance, fees, and upfront costs. Since all of these costs are determined through negotiating with sales people – the advertised cost of leasing is almost never the actual cost of leasing.
Car subscription services work more like short term leases, or long-term car rental services, with a transparent, all-inclusive monthly fee. This fee can cover a range of those extra costs that surprise you when leasing, but regardless of whether it covers all, or just some, of them – usually, the price you see is the price you pay.
Like leasing or renting, you don’t own the car you’ve subscribed to, and you’re only committed to your subscribed car for the term limit – which can be as long as a few years, or as short as a per month, or even a per week basis. But unlike leasing or renting, you’ll have access to a variety of cars. Depending on the service, your monthly fee will allow you to swap between available models a certain amount of times, or you’ll be presented with a marketplace of cars, each with their own monthly fee that you can switch between either at the end of your term, or upon cancellation. The best car subscriptions services out there are focused on simplicity, ease of use, and flexibility – that’s why you’ll often be able to manage all aspects of your
The big names in car subscription
Finding the right subscription service for you can be tricky; the playing field is growing quickly, and there are already a ton of players out there, each offering their own unique take on the car subscription service. Here’s a look at some of the top car subscription services out there.
Access by BMW – Although it only services the Nashville metro area, BMW’s car subscription service is one of the best you’ll find. With a three-tiered pricing plan (either $995, $1,399, or $2,699 per month) and unlimited swaps between to up to 13 BMW models, from the super sleek M class cars to the more family-friendly X class, you’re bound to find a plan that works for you. It might be one of the pricier options on this list but, as the saying goes, you get what you pay for.
LMP Subscriptions – This is one of the services mentioned earlier, where each car has its own monthly fee. LMP Subscriptions operates in Florida, New York, and Connecticut, and offers two different types of subscription plan: Subscribe Monthly or Subscribe to Own. Managing a fleet of cars that they’ve purchased – either new or used – from local dealerships, auctions, or straight from customers, LMP offers their cars first as subscriptions, then as used cars for sale. Subscribing monthly will cost roughly anywhere from $70 to $3000 per month, with an upfront activation fee that’s about 10 times the monthly fee – this monthly fee varies depending on if you choose to subscribe per month, or for a term of 6, 12, or 24 months. Subscribing to own means agreeing to either a 6 or 12 month subscription term and then agreeing to buy the car at a used price once your term is completed.
Ameridrive – While almost all other subscription services charge a monthly fee, Ameridrive instead charges a weekly fee that varies for each available car . They also make their fleet of cars available for use as ride-sharing vehicles. These two features make Ameridrive, which services parts of Georgia, Florida, and Texas quite the unique offering. After paying the $149 initial subscription fee that comes with each car, you can expect to pay anywhere from $198 to $348 per week – which is a great price point considering you’ll be choosing from cars from just about every popular brand you can think of.
Porsche Drive – Porsche’s car subscription service is undoubtedly one of the best out there. Although it comes with a hefty price tag, the flexibility of Porsche Drive’s service, and the quality of its cars, are second to none. Customers have the option to subscribe to a single Porsche car for 1 or 3 month terms at a time, or choose between two of the multi-vehicle plans (the “Launch” tier costs $2,100 per month and the “Accelerate” costs $3,100) and have unlimited swaps between over 20 Porsche models. While Porsche Drive doesn’t offer a unique “spin” on the subscription concept, what it does offer is luxury and quality, setting a standard for a car subscription service’s basic offerings.
Audi Select – Think of Audi Select as an affordable luxury car subscription service, but with one huge benefit over almost all other services: an unlimited mileage allowance. Like a traditional lease, a subscribed car will come with a monthly mileage allowance, unless you subscribe to Audi Select. Both payments tiers (the “Core Collection” at $995 per month, and the “Premier Collection” at $1,495 per month) get unlimited miles, as well as two vehicle swaps per month – which is nothing to laugh at considering there are up to 8 available Audi models. Though it only currently operates in the Dallas/Fort Worth area, Audi has future plans to expand.
Car subscription services are the digital age’s response to traditional car ownership or leasing; they’re all about making things simpler and easier. And even though it’s a new industry and, perhaps, your ideal service may not be available in your area just yet – the market is growing. Fast. Instead of dealing with car salespeople, negotiating prices and hidden fees, and managing all the other costs of leasing or owning a car (maintenance, roadside assistance), subscription services aim to streamline everything into one transparent monthly fee.
So, if you’re in the market for a new car, checkout our in-depth reviews of all the best car subscriptions services available.