Dubai: Wouldn’t it be great if your car insurance, car repairs, roadside assistance and fees were all included in one convenient monthly payment?
Car subscription services are an alternative to leasing, offering the use of a car for a flat monthly fee that typically covers insurance, maintenance and roadside assistance. Car subscriptions fit right in at a time when a younger generation of users prefers on-demand mobility to buying a car.
According to research, the car subscription category could eventually account for 40 percent of all new car sales worldwide and develop into a market of its own worth $40 billion (147 billion dirhams).
Car subscriptions in the UAE follow a global trend
According to analysts, digital platforms offering monthly car subscriptions and car dealers in the UAE are working together to tap into a trend that is likely to gain significant momentum over the next two to three years.
In this way, they are trying to overtake the traditional car rental market – and offer another option to citizens who have previously used ride-sharing services via apps.
In some key European markets, automakers have jumped directly into the car subscription business as the number of individual car owners there is declining significantly.
Car subscriptions in the UAE follow a global trend
What is the difference between renting and subscribing to a car?
Don’t renting a car and subscribing to one ultimately serve the same purpose, at least from the user’s perspective? Not necessarily.
The main difference between a car subscription and a traditional rental is the term.
Rental periods are generally limited to a maximum period, ranging from a few weeks to several months. Subscription services, on the other hand, are designed to run for as long as you need them.
Car rental companies try to keep their customers tied to the same car for a long time. With a subscription, you can change your car every 30 days.
In addition, you get exactly the vehicle you subscribe to, so you choose not only a model, but also the color, equipment (version or model) and other specifications.
What is the difference between renting and subscribing to a car?
What are the benefits of subscription services?
The big advantage of car subscription services is the all-inclusive monthly payment that consolidates the usual costs of owning or leasing a car.
Main advantage of car subscriptions: all-inclusive monthly fee
Some subscription services offer all-inclusive packages so you can consolidate all your car expenses in one place.
Of course, you will still have to cover the cost of fuel and pay a 500 – 1,000 dirham excess if you are ever involved in an accident, but everything else may be included in the single price you pay each month.
Of course, this comfort comes at a price. For a luxury car, you may pay up to 1,900 dirhams per month, while for a small, inexpensive car, you may pay just 400 dirhams per month.
In addition, most subscriptions include convenient vehicle delivery and pickup, so you never have to leave home to exchange your vehicle.
A notable benefit of some high-end subscription services is the ability to switch vehicles without limit, giving you the freedom to choose the car you want and the length of your trip.
Subscriptions are therefore generally well suited to drivers who get bored quickly and want a change while driving.
Should I join a car subscription service?
What are the disadvantages of subscription services?
The biggest disadvantage of car subscription services is the amount you pay for the above convenience.
Surveys show that subscription services cost about 28 to 102 percent more per month than leasing, insuring and maintaining a comparable vehicle.
However, this does not include the participation fees for a program, which usually amount to at least several hundred dirhams.
Additionally, many of the cheaper programs impose monthly mileage limits that you must adhere to and do not give you the freedom to change cars at will.
Conclusion: Should I join a car subscription service?
If you have the disposable income and the soul of an enthusiast, a subscription service may make sense. You can continually upgrade to the latest models or swap out vehicles as you please.
However, if economy and practicality are important to you, leasing a vehicle is a better choice as there is a good chance that you will pay a significantly lower amount when leasing.
What are the disadvantages of subscription services?
Key findings
In the long run, leasing a car is much cheaper than subscribing to a car service.
That’s why car subscriptions are particularly suitable for selected groups of people: for example, those who want to change cars more often, those who need a car quickly or those who only stay in one place for a short time.
As with car ownership, the nicer and newer the car, the more expensive it will be to rent it through a subscription program. As tempting as it may be, it’s important not to get carried away by constantly upgrading to newer cars, as this can drive up your cost of living.
So is a car subscription really a better alternative than taking out a loan against an asset that is losing value? The answer depends on how often you drive, what kind of car you want, and whether you value convenience over affordability.
