By Shubh Bansal
When FM Nirmala Sitharaman attributed changing preferences of millennials as one of the reasons for the auto industry slowdown, she was not completely wrong. Today, many customers are not willing to go for an outright purchase with associated repayment and management responsibilities. Concepts like vehicle leasing and subscription are here to stay. Now, the question is: leasing, subscribing, or buying a new or used car—which is the best choice?
Leasing or subscribing: Leasing a car is light on the pocket initially, as there is no down-payment. But if your job or lifestyle requires you to frequently shift from one place to another, subscription model would work the best. This is because leasing needs a commitment of 2-4 years, and most companies do not allow shifting of these vehicles. They also set a cap on the miles driven, with exorbitant charges for more miles. This is not the case with subscriptions.
Leasing is comparatively cost-efficient than subscription schemes. Most car subscription companies’ monthly fees include basic rental, miles, maintenance, breakdown assistance, and even insurance. Even in case of damages, regardless of the degree, leasing requires one to pay for the repairs while subscription does not. However, subscription cars come with a commercial licence plate, taking away the ‘personal’ aspect.
Buying a used car: It’s your ‘own’ car, not a rental. If you have enough savings for a down-payment and are looking for a longer tenure and a more personalised ownership, then buying a used car can turn out to be the most financially-sound choice. In essence, if your main purpose for owning a car is commuting, then car leasing might work for you. If you want a flexible and convenient experience, then car subscription will. However, if you are looking for a safer financial bet from a long-term purview, the need for personalisation, and being a car owner in true sense, then buying a used car should be the way to go.
(The author is co-founder, Truebil, a used cars marketplace. Views are personal.)
