What is vehicle subscription?
Vehicles subscription is an increasingly popular way to get a vehicle (or vehicles) without having to buy or lease it. With vehicle subscription, just like when leasing an apartment, the vehicle is owned by the service provider not by the subscriber. As result, the subscriber does not carry the cost of the asset or the initial investment on the books and does not take the depreciation hit for the asset. In addition, most aspects of the maintenance of the subscribed vehicles are carried by the service provider. In general you can think of subscription as a hybrid between Lease and Rental, with the cost advantage of leasing and flexibility of rental.
- Vehicle subscription requires low or no downpayment.
- Subscription offers more flexibility as business needs change (no costly purchase or sale of vehicles involved).
- The monthly payment covers all aspects of the vehicle other than Fuel and Insurance.
- Accountants love it since most vehicle expenseS are consolidated into one line entry in the financial books.