Car Subscription: What is it and how it works

30 Jun 2023    |   3 min read

Car subscription is a relatively new way of making use of a car that offers an alternative to traditional car ownership or leasing and which is moving fast towards an innovative and technological approach.

It is a service where individuals or businesses pay a monthly fee to access and use a vehicle without the long-term commitment and responsibilities associated with owning or leasing a car.

The market size of Car Subscription exceeded $5 billion in 2022 and it is forecast to grow at over 35% CAGR between 2023 and 2032.

Vehicle subscription services are typically offered by car manufacturers, car rentals, dealerships but also third party car subscription service companies. Some examples in the current market are:

  • Care by Volvo: A subscription service offered by Volvo that includes insurance, maintenance, and roadside assistance.
  • Flexdrive: A third-party car subscription service that partners with dealerships to offer flexible car subscriptions.
  • ViveLaCar: A car subscription service that offers flexible vehicle usage to individuals and businesses. 

Under a vehicles subscription model flexibility comes first. Customers typically sign up for a specific duration, such as a few months or a year, and pay a monthly fee that covers various costs associated with owning and operating a car. These costs often include vehicle financing or leasing, insurance, maintenance, roadside assistance, and sometimes even registration and taxes.

Car subscription
Pic credit by USA Today

How Car Subscription works

The process may slightly vary depending on the provider but the overall path comprehends:

1- Selection of the vehicle subscription service that better suits the user’s needs.

2- Research of the car the user wants, the best make and model as if it was a leasing or rental mode.

3- Application and Approval comes once the user has defined the most tailored subscription option. In this phase, some economic, personal document, and driving license checks follow.

4- Vehicle pickup/delivery happens once the payment is processed. The car subscription provider may deliver the car to the customer’s desired location or arrange the pick up from a designated dealership.

5- Subscription period starts when the customer officially gets possession of the car. The customer can use the car for the agreed subscription period, usually on a monthly basis. The monthly fee covers several costs as previously mentioned: leasing of the vehicle, insurance, maintenance and other services specified in the subscription contract.

6- Flexibility is one of the main benefits when it comes to car subscription models. Depending on the contract and the contractor, users have the freedom to switch car models within the provider’s fleet. This allows them to change cars if their needs or preferences change. Some providers also offer the option to upgrade to a higher-tier vehicle for an additional fee.

7- Renewal or termination of the subscription is the final step of the process, and it’s pretty easy. Customers can either decide to proceed with another term renewal or close the contract and return the car.

Car Subscription costs

When it comes to costs, it is important to have an overview of the investment involved before making a medium-to-long-term commitment.

Vehicle subscription services typically involve a monthly fee that covers various expenses, vehicle financing, maintenance costs, and many others, so there are no specific monthly extras such as insurance. Everything is part of the monthly subscription.

When it comes to the end of a contract:

A classic lease, which typically lasts two to four years, gives the customer three options:

– Final installment payment with subsequent car ownership

– Ownership of the car having paid regular monthly installments

– No final installment by stipulating a new leasing contract with a new car.

With car subscription it’s slightly different: at the end of the contract, which is a month-to-month based subscription for a specific period, the customer cannot take ownership of the car but can decide either to switch vehicle (or keep the same one) and renew the contract or simply close the contract without any additional installment to be paid.

Perks and drawbacks

Some of the main benefits of a Car subscription service are:

  • Flexibility in switching vehicle during the subscription period itself
  • Convenience in vehicle ownership since car subscription handles maintenance, insurance, and registration, saving you time and hassle associated with vehicle ownership.

While some of the main disadvantages in Car Subscription are:

  • Costs sometimes can be higher. It can be more expensive than traditional car ownership or leasing in the long run, particularly if users only need a vehicle for a limited time.
  • Availability and Constraints such as few vehicles available depending on the location and imposed mileage restrictions, which can be inconvenient if a user frequently drives long distances.

The future of Car Subscription

As the transportation landscape continues to evolve, vehicle subscriptions are likely to become an increasingly popular option for individuals and businesses alike. Providers may expand their fleets to include more sustainable vehicles, offer more flexible contract terms, and partner with other companies to offer additional services and benefits. By embracing the car subscription model, individuals can navigate the evolving transportation landscape, enjoy hassle-free mobility, and redefine their driving experience in a way that suits their lifestyle.

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About the author


Benedetta Biggi

Sales and Marketing Associate at 2hire

I love running and daydreaming losing count of the distance I’m covering, cooking (and especially eating) and Drake is my spirit guide.