With average car prices rising and many people struggling to balance the costs of housing, groceries, childcare, student loans, and credit card debt, vehicle subscription services are becoming increasingly popular. Customers appreciate the savings and flexibility that subscription plans provide.

How Vehicle Subscription Services Work

Several companies offer vehicle subscription services. The way each operates varies to some degree, but in general, a customer can choose a brand new or previously owned, but fairly new, vehicle. In some cases, a subscription company purchases vehicles, and in other cases a company partners with dealerships.

After a person’s driving record has been checked and the customer has provided payment information, he or she can pick up a car. A contract and credit check are often not required. Many companies allow customers to easily return a car or exchange it for another.

The monthly fee typically covers the car itself as well as a warranty, maintenance, insurance, and roadside assistance. A driver may be required to pay a deductible if he or she causes an accident.

Why Customers Choose Vehicle Subscriptions

A typical car loan can take five or six years to pay off, and a lease generally involves a contract lasting about three years. For people who need transportation but don’t want to commit to a car they might not like or a monthly payment they might struggle to afford, a subscription service can be an attractive alternative. It can also help consumers avoid large down payments often required with a loan or lease.

A subscription service can help customers avoid getting trapped in a cycle of debt. Many people trade in a vehicle before paying off the loan and then take out a loan for a newer vehicle that includes the money still owed for the old car. That practice can lead to seemingly insurmountable debt.

A vehicle subscription service may not be cheaper than a conventional loan or lease in the long run, but customers often choose a subscription because of its flexibility and the ability to avoid surprise repair bills. Many people like the option of getting a vehicle without making a long-term commitment and being able to change their minds without a hassle. A subscription service may also allow consumers to drive luxury vehicles they would otherwise be unable to afford.

Get Help for Your Vehicle Subscription Service

Vehicle subscription services are becoming popular, particularly with younger drivers, who value flexibility and want to avoid incurring long-term debt. As more and more consumers learn how these services work and understand their advantages compared to traditional loan and lease models, vehicle subscriptions may become the norm.

Subscription DNA makes it easy for businesses in a variety of industries to process monthly recurring payments. If you run or are thinking about starting a vehicle subscription service, we can help you make the billing process as smooth as possible for you and your customers. Contact Subscription DNA today to learn more.