Zoomcar wants you to “subscribe” to its auto service instead of buying one.

We’ve heard about subscriptions for music, movies, books, and even games, but can a subscription service work for owning a car? Indian driverless car rental company Zoomcar seems to think so. The company recently launched a service called ZAP Subscribe, which allows you to pay a flat monthly fee to rent a car and get rid of the hassle of owning such as maintenance and paying for insurance.

The model is quite similar to renting a car through one of the many car rental services in India, but ZAP Subscribe does not have the long term commitments associated with renting. Many car rental companies offer similar prices, but the problem is usually a three year contract, and the deal is not worth it for most people unless they get such an offer. through their company. ZAP Subscribe claims to offer the flexibility of a shorter term with all the benefits of renting a car.

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While it looks appealing on paper, the cost is something to worry about. With subscription fees starting at around Rs. 20,000 including tax per month, does it make sense to subscribe to a car instead of buying a new or used one?

Greg Moran, CEO of Zoomcar, told Gadgets 360 that ZAP Subscribe is primarily used by two types of people: those in their late 20s or early 30s who have not yet purchased a car, and those in the age group 35-45 years who need an extra car. Since you don’t have to pay a huge amount up front or worry about the down payment if you take out a loan, this seems like an attractive option.

Moran says Zoomcar allows people to sign up on a 6, 12, or 24 month contract, and in most cases subscribers get a brand new car. “We want to have some consistency in our program and create a better overall experience for tenants. If the inventory is quite variable, it becomes difficult… The 6 and 12 month option is not as popular as 24 months, ”explains Moran.

There is no exit charge with this program as Zoomcar claims that subscribers can exit the program at any time with one month’s notice. The shorter contract terms serve two purposes: to cater for those who are visiting a different city at short notice, and for those who wish to change cars frequently. Registration is pretty straightforward: choose your car, create an account, download the driver’s license and PAN card, and you’re done. The company says its user agreement is also fully online to eliminate paperwork.

The program has accelerated fairly quickly since its launch in March 2018, according to Zoomcar. “It looks like we’ll reach 2,000 (subscribers) by the end of this quarter. Our goal is to reach 10,000 car subscribers by the end of this year, ”he adds.

Zoomcar, of course, is known for offering driverless rentals in the Indian market, and it has found a way to make ZAP Subscribe part of its core business. Moran says Zoomcar allows ZAP subscribers to list their cars on its driverless rental platforms so they can recoup some of the subscription fees while the car is idle. This way, the overall cost of the subscription could drop significantly.

“Most associates end up signing up for about 20 days a month,” says Morgan. “Most people only need the car five to eight days a month. It is very rare that someone announces the car for only five days.

While in theory ZAP Subscribe seems like a good deal, some basic math suggests that you’ll end up paying a little more than owning a car if you choose Zoomcar’s subscriptions. Before we get there, it’s important to note some of the downsides of subscribing to a Zoomcar vehicle instead of owning a car. Zoomcar vehicles have commercial license plates, which means that if you leave your home country you will have to pay road tax. In some states, commercial vehicles are required by law to be equipped with cruise control. This means that you cannot drive the vehicle faster than 80 km / h.

If you offer your car to others for rent through Zoomcar, you will recoup part of the subscription fee, but there is always the fear that other drivers will have an aggressive driving style which will lead to faster wear and tear. This is something you can control with a car you own, but not a car you lease from others. There are other clauses in the agreement such that you cannot drive more than 8,000 km per month, which is a very generous limit that most people will not reach even after several interstate trips, but this still needs to be mentioned.

Renting a car in India is now as easy as a few clicks – but do the math add up?

Take the example of Tata Tiago. Zoomcar is offering this for Rs. 17,999, with Rs. 2,100 as a deposit. If you add 12% GST you end up paying Rs. 20,159 per month. Over 24 months, this comes to around Rs. 4.83 lakh. The road price of the Tata Tiago XM variant is about Rs. 5.5 lakh to Rs. 6 lakh and you can add Rs. 20,000 per year as maintenance and insurance costs to that, which you don’t have to pay if you subscribe to Zoomcar.

This shows quite clearly that if you want a short-term car, the ZAP subscription can prove to be a relatively simple and affordable option. However, in the longer term, say three to five years, it is more economical to buy your own car. For more detailed calculations, see this article on Enidhi India it shows how subscriptions compare to long-term costs of ownership.

It’s important to understand that ZAP Subscribe isn’t for everyone. If you absolutely hate going through the paperwork of buying a new car, or if you need a car for a short time – say six months to a year, then this could be one of the best ways. easier to get your own car. . However, the cost of ownership is always higher than buying a used car at a reduced price or buying a new car on loan. If you need a car for very short periods of time only a few days a week, you can also easily grab a taxi instead and not have to worry about paying a large subscription.