Car subscription or leasing: Differences, costs and more information

Both car subscriptions and leasing are popular alternatives to buying a car. With both models, you drive a car for a fixed term and pay a monthly rate for it.

However, car subscriptions and leasing differ in their terms. While two years are standard for leasing, there are subscription models that only last a few months.

However, car subscriptions cost a little more. The monthly rate also includes ancillary costs such as insurance, taxes and service. Only the fuel costs have to be paid additionally. The leasing rate, on the other hand, only covers the cost of the vehicle.

In the past, anyone who wanted to buy a vehicle had to make one decision: a new car or a used car. In the meantime, however, there are numerous alternatives to buying a car, some of which can be significantly more attractive. This applies in particular to leasing and – more recently – car subscriptions. What exactly is it all about, how do the two financing models differ and for whom are they worthwhile?

What distinguishes car leasing?

Car leasing is an established financing model for new vehicles. Private or commercial customers (the latter usually on better terms) lease a vehicle for a predetermined period of time, which usually lasts at least 24 months. During the term you pay a monthly rate for your car. In addition, almost all providers have one-time additional costs. There is usually a provision fee of around 1000.00 euros. In addition, special payments may be requested. This is especially true for e-cars that qualify for the BAFA environmental bonus of up to 6000.00 euros. The monthly rate only covers the cost of the car – service, insurance, taxes and more are billed separately. With a VW Golf, for example, you have to budget around 150.00 euros per month for this. That was the result of a calculation by the ADAC.

A distinction is made between mileage leasing and residual value leasing. With kilometer leasing, there is a predetermined number of kilometers that the vehicle is allowed to drive. If it is exceeded, additional payments must be made. With residual value leasing, on the other hand, a value is determined that the vehicle should still have after the end of the term. Here, too, additional payments are due if the residual value is not reached (e.g. due to excessive wear or signs of use).

What is a car subscription?

Similar to leasing, car subscriptions give drivers a vehicle for a predetermined period of time. This term can be determined flexibly in some cases. Depending on the provider, it starts at one month and only rarely exceeds the one-year limit. Long-term rental is therefore often spoken of. There are also customizable free mileage packages. Car subscriptions are also aimed at both private customers and business people. Cars that are available as part of the subscription are new cars that are immediately available or recently used cars.

The special thing about the car subscription is that the monthly rate includes all ancillary costs apart from operating costs such as refueling. This means that subscribers do not have to worry about insurance, taxes or maintenance themselves. Many providers also do not make special payments for the provision of the vehicle or the BAFA environmental bonus. As a result, the car subscription offers a high level of financial planning security. However, the rates are slightly higher.

Car subscription vs leasing: What are the differences?

Car subscriptions and leasing have some things in common - for example, they have similar requirements such as proven creditworthiness or an existing driver's license. But there are also some differences. The most important include:

1st monthly installment

One of the biggest differences between car subscriptions and leasing is the monthly rate, which is significantly higher for subscriptions. On the one hand, this is due to the shorter maturities. The longer the term, the lower the rates - this applies to both leasing and the subscription. On the other hand, because the car subscription is an all-inclusive rate, it also includes ancillary costs such as insurance, taxes and maintenance. These costs are added to leasing.

2. Services and additional costs

When leasing, there are additional costs that cannot be ignored. With the provision fee, any special payments and costs and monthly fixed costs, several hundred euros are added to the monthly rate. With a car subscription, on the other hand, you only pay the agreed amount plus fuel costs. With a car subscription, you don't have to worry about anything yourself, which is also particularly convenient. However, this means that you are bound by the conditions of your provider and cannot obtain your own offers for insurance or repairs. It may be the case that you pay for premium services that you may not even need.

3. Term and Delivery Time

The last important difference between car subscriptions and leasing is the term and delivery time. The car subscription with its short terms clearly scores here. You don't tie yourself to a vehicle for too long, giving you maximum flexibility. In addition, subscription cars are available either immediately or within a few weeks - there are no long waiting times of several months as with leasing.

Costs: Are car subscriptions more expensive than leasing?

As already mentioned, the monthly installments are higher for subscriptions than for leasing. But there are also no additional costs - apart from fuel costs. That's why car subscriptions don't necessarily have to be more expensive. It is therefore important to calculate and compare all costs before concluding a subscription or leasing contract. Are there any one-off payments such as a typical leasing commitment fee? That should also be taken into account.

Car subscription or leasing - which is more worthwhile?

Car subscriptions are convenient. You don't have to worry about anything and you don't have any acquisition costs that you have to pay. They are also flexible and readily available. However, they are not quite as transparent because you do not know exactly how the rate is composed. We therefore only recommend subscriptions as a short-term solution. For example, if you want to avoid long terms so that you don't have to tie yourself to a car that may not be needed in a year's time, a subscription is a good idea. On the other hand, if you know that your situation will not change in the next few years, you should opt for leasing. This will probably save you some money in the long run. In addition, you don't have to get used to a new car every twelve months at the latest.

Whether car subscription or leasing — you will find great deals here

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