What is a Car Subscription? How It Works in India Explained

The concept of owning assets, especially depreciating ones like cars, is slowly becoming outdated for a growing number of Indians. With increasing urbanisation, changing consumer behaviour, and a digital lifestyle, people are looking for flexible and reliable alternatives. This is where car subscription services have entered the scene, offering an innovative, convenient, and increasingly popular solution to personal mobility.

Now, what is a car subscription? How is it different from buying, renting, or leasing a car? What does the process look like in the Indian context? This guide will help you explore and understand how car subscriptions work in India and whether they’re the right choice for you.

Understanding the Concept of Car Subscription:

The subscription service lets one use the car for a fixed monthly payment without any usual ownership concerns. It is like leasing, except that it is more flexible. The monthly subscription fee covers the use of the vehicle, its maintenance, insurance, roadside assistance, and road tax. Except for that, you pay for things like fuel, toll charges, and fines.

With the wrath of having a good personal vehicle, one can always join the subscription service and upgrade, return, or put down a car instead of having any long-term tie. That is some lease that doesn’t bother you. You can treat the car like your own in every sense of the word, without caring about depreciation, resale, or servicing.

How the Subscription Model Works in India

In India, the car subscription model is rising, especially in metro cities like Bengaluru, Delhi-NCR, Mumbai, Pune, and Hyderabad. Both car manufacturers and third-party mobility platforms offer subscription plans. The process is easy and user-friendly, which attracts professionals to these cities.

Choosing a Provider:

Car subscription providers in India are mainly of two types. They are:

Original Equipment Manufacturers (OEMs): Companies like Maruti Suzuki, Hyundai, Tata Motors, and Mahindra have entered the subscription space through their official dealerships or in partnership with leasing companies like ORIX and ALD Automotive.

Mobility Startups and Aggregators: Platforms such as Revv, Myles, and Quiklyz offer a wide variety of cars from different manufacturers, allowing consumers more choices and often more flexible subscription terms.

Selecting a Car and Tenure:

Once you’ve picked your subscription service provider, you can browse the vehicles available from the subscription car service via the provider’s online portal or app. One can select from short- and long-term options. The shortest tenure can be from 1 month, and the longest one can be from 36 to 48 months. The majority of companies allow switching vehicles or cancelling subscriptions halfway through, albeit with some conditions. The monthly fee would differ depending on the model of the car, the city of usage, the tenure, and the allowed mileage slab.

Documentation and Eligibility:

For a car subscription in India, the basic documents are required, which include:

A valid driving license
A government-issued ID (like Aadhaar or PAN)
An Address proof
Income proof (salary slips or bank statements)

The eligibility is decided based on the credit profile and the income stability of the person. The salaried individuals with a decent credit score get the approval quickly and fully digitally.

Vehicle Delivery and Usage:

After completing documentation and making a refundable security deposit or the first month’s payment (or both), the car is delivered to your doorstep. Many providers offer sanitisation and pre-inspection services and make sure that the car is in the best condition.

Right from that time, you use the car just like your own. Drive it to work, use it for weekend trips, or your daily commute; there are generally no restrictions on how often and where you use it, as long as you stay within the mileage limit agreed upon during the subscription.

Maintenance and Servicing:

One of the biggest benefits of car subscriptions is that they include the car maintenance facility. The service provider takes care of regular servicing, oil changes, tyre checks, and repairs. In many instances, they also offer doorstep pickup and drop-off services. In case of any inconvenience, the 24/7 customer support team is ready to help you and make your ride comfortable.

What Happens at the End of the Subscription?

At the end of the subscription period, you usually get a few options to choose from:

Return the Car: You can hand over the car with no further obligations (except for any wear-and-tear charges or excess mileage).

Extend the Subscription: If you want to continue using the car, many service providers allow easy renewals with a discounted price and longer commitments.

Switch to a New Car: Many platforms encourage switching models at the end of your subscription term, which gives you the freedom and opportunity to drive a new and
different car.

Buy the Car: Some providers also provide you with the option to buy the car at the market price or a pre-agreed residual price.

How It Differs from Buying, Leasing, or Renting?

Buying, Leasing, or renting a car differs in various perspectives. They are as follows:

Compared to Buying:

Buying a car requires a large investment or a car loan. You must also deal with registration management, insurance, road tax, and regular maintenance of the car. Owning a car gives you the freedom to customise and use the car as you like, but it also comes with liabilities like depreciation and resale hassles.

Subscriptions, on the other hand, keep you free from all the paperwork and costs associated with ownership. However, if you look for a long-term period (say 5 years), the full cost of the subscription may be higher than buying.

Compared to Leasing:

Leasing and subscribing to a car typically differ in a way that leasing is for a longer period and offers less flexibility, while subscription offers more flexibility. You will still be responsible for insurance and servicing, depending on the lease agreement. Subscriptions are designed for more frequent usage changes and lower commitment.

Compared to Renting:

Car rentals are usually short-term (hourly or daily) and are meant for quick and rare needs. Subscriptions stand between renting and owning and are suitable for people who need a car for everyday personal use but don’t want the long-term hassle of ownership.

Advantages of Car Subscriptions:

There are various reasons why car subscriptions are becoming popular in India:

No Initial Investment: One of the biggest barriers standing in the way of car ownership is a huge initial investment. Subscription to a car means getting away with that dastardly down payment, paving an easier pathway for one to start driving.

Inclusive Package: Maintenance, insurance, taxes, and servicing usually take their toll during a separate billing from your monthly fees. Transparent charging without the trickery of hidden costs plaguing car ownership is something enjoyed here.

Trouble-Free Lifestyle: The dealership will take care of everything from the delivery of your car right to your doorstep, along with servicing, to roadside assistance any time of the day. Hence, busy professionals would be craving for this convenience!

Flexibility: If you want to upgrade every year or take a car for just a few months, subscriptions give you flexibility that ownership cannot.

Perfect for Short-Term or Temporary Residents: In case of relocation to a new city for some temporary work or study, subscriptions offer you the necessary flexibility without any definite financial commitments.

Challenges and Limitations:

Despite the many advantages, car subscriptions do have some limitations that prospective users should be aware of:

Cost Over Long Term: If you plan to keep the same car for more than 4-5 years, subscription costs will likely exceed what you would pay to own a vehicle outright.
Mileage Restrictions: Most providers impose annual mileage caps (such as 10,000 to 25,000 kilometres). Exceeding these limits incurs additional charges.
No Customisation: You cannot modify or customise a subscription car. This can be a downside for enthusiasts who like to personalise their vehicles.
4. Damage Liability: While basic maintenance is covered, users are usually responsible for damages beyond normal wear and tear. Dents, scratches, or accidents can lead to penalties.

Is It Right for You?

Car subscriptions are perfect for people who value convenience, flexibility, and reduced initial costs compared to sustained investment. They are especially suitable for:

The professionals on short-term projects
People new to a city or a country
The individuals who like to change cars frequently
Customers who are in a dilemma about long-term commitments
Those experimenting with electric or luxury vehicles

However, if you’re planning to drive long distances regularly or want a vehicle you can call your own for the next decade, buying might be a better financial decision.

The Future of Car Subscriptions in India:

With demand increasing for flexible mobility solutions, the car subscription model is likely to grow in India. As more carmakers want handy car subscription plans, we can expect better deals, competitive pricing, and flexible mobility solutions.

In a world shifting from ownership to access, car subscriptions mark a big change and represent a significant change in how Indians view car use. They don’t just offer ease, they change it.

Car subscriptions bring a refreshing change to the traditional car ownership model in India. By offering flexibility, minimal paperwork, zero maintenance worries, and all-inclusive pricing, they suit the fast-paced, ever-evolving lifestyle of urban India. While not for everyone, they are a perfect match for those seeking mobility without the strings attached. As the market matures and offerings expand, car subscriptions may very well become the default way to drive shortly.