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Car Subscription – Advantages of this additional form of procurement

Have you already heard about car subscriptions or even actively used them? We take a look at what car subscriptions are and what advantages this additional form of procurement can have for your fleet.

June 4, 2021

Have you already heard about car subscriptions or even actively used them? We take a look at what car subscriptions are and what advantages this additional form of procurement can have for your fleet.

What forms of financing and procurement are available for your fleet?

As a fleet manager, you can choose between traditional forms of financing such as purchasing vehicles or financing, leasing or even long-term and short-term rental. A newer alternative for the procurement of vehicles, on the other hand, is the so-called car subscription.

When purchasing or financing, you as a company must take into account not only the purchase price for the total cost of ownership (TCO), but also the interest, depreciation and decommissioning during the vehicle’s life cycle.

In the case of leasing, certain parameters such as duration, leasing mileage, etc. are specified. Important for the company from the cost point of view is the monthly leasing rate and also other possible further costs for maintenance, tires, or wear and tear as well as at the leasing return. When leasing vehicles, the main focus is on the leasing conditions; as a rule, only the leasing costs are incurred from a cost perspective.

Conventional forms of financing therefore sometimes involve high investment costs as well as fixed and long terms, giving you little leeway and flexibility as your company’s requirements and needs change. In addition, the vehicles are rarely available immediately, so a certain amount of advance planning is required.

Especially for times with little planning certainty, focus on fixed cost reduction, and to bridge fluctuations or gaps between vehicles financed differently, car subscriptions can be a useful addition to your fleet. In addition, the car subscription does not entail a very long commitment, as is the case with leasing, purchase, and credit.

What is a car subscription as a form of procurement?

A car subscription is a special type of vehicle rental. Comparable to other flat rates such as for music or streaming, you pay a fixed monthly price and have a car at your disposal.

In terms of design, the car subscription is located between car sharing (e.g. DriveNow, Car2Go) with very short-term terms and long-term rental or leasing with terms of several years.

The big difference between renting a car or leasing is flexibility. A car subscription is available at short notice, can be canceled on a monthly basis, and offers many advantages over conventional forms of financing with a high degree of transparency and precisely plannable costs without large fixed costs.

The car subscription at a glance:

  • You are flexible in your choice of model.
  • With the car subscription, you can normally decide flexibly on a monthly basis whether to extend or terminate the lease. The term, therefore, has no influence on the monthly price.
  • The monthly price includes all costs except fuel costs.
  • Monthly mileage is agreed and, as with renting or leasing, additional mileage is charged.
  • All costs for maintenance and wear and tear are borne by the provider, i.e. there are no additional costs for you.
  • The insurance is also included in the total price, here the providers usually offer comprehensive insurance in the package.
  • The vehicles are equipped with tires according to the season.
  • And with regard to planning reliability: depending on the provider, the vehicles are also available at very short notice, e.g. the next day. In the case of leasing, this may well take 3-6 months until the vehicle is on the road.

What are the advantages of a car subscription compared to other forms of procurement?

  • Registration and HU: The vehicles are registered and ready to go. You have no administration work and no costs
  • Maintenance and wear and tear: All maintenance and wear parts are included
  • Can be canceled monthly: After a one-month term, the subscription can be canceled or flexibly extended
  • Maximum flexibility: No initial costs and no minimum terms
  • Seasonal tires: The safety of your drivers is guaranteed
  • Fully comprehensive insurance and theft protection: You don’t have to worry about insurance
  • A simple solution to bridge a period without a vehicle for a driver
  • Flexibility, e.g. to change the model more often
  • All-round carefree package and all costs except fuel costs are included
  • Short procurement time, usually the vehicle is ready within 48 hours
  • Transparent prices without hidden costs

What offers are there for car subscriptions?

Although car subscription is still a relatively new topic, there are already some providers in the market. Besides car manufacturers (e.g. Care by Volvo, MINI Subscribe), there are also younger companies (ViveLaCar, Carminga) and well-known car rental companies (Sixt+, Hertz MiniLease).

Here are some tips on how to successfully choose the car subscription that is right for you:

  • Car: What make and model do you want? Basically, there is usually a variety of manufacturers and vehicle models to choose from.
  • Availability: Established providers usually offer availability within the next 48 hours. Depending on the manufacturer or model, it may take a little longer.
  • Inclusive mileage: Here, as with the other forms of procurement, you should also carefully consider what mileage is necessary for the vehicle in order to avoid excess or reduced mileage.

Have a good trip!

Did you already know? We now also offer car subscriptions via the Avrios Marketplace. You benefit from the attractive conditions of our cooperation partner Sixt+.

Get started with Avrios today and create a free account.

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