Vehicle subscription gains space, with insurance and IPVA skyrocketing. See what’s worth it

Maintaining and buying a vehicle have become difficult dreams for Brazilians. With more expensive insurance — policies rose 32% last year, according to the IBGE’s Extended Consumer Price Index (IPCA) — and the Tax on Motor Vehicle Ownership (IPVA) heavier in the pocket in 2023, services vehicle subscriptions have been gaining ground among consumers. The modality, recent on the market, has expanded in rental companies, but the choice of this long-term rental should take into account the usage profile.

Sector data point to a growing demand for the service in recent years — the size of the fleet increased from 80,000 vehicles in 2020 to 110,000 in October 2022, the latest balance sheet available. The number, compiled by the Brazilian Association of Car Rental Companies (Abla), represents 11% of the total fleet of rental companies in the country.

— In the pandemic, companies and families that got rid of their cars to have resources, when they tried to “buy back”, faced credit restrictions. It was the opportunity to “discover” the rental companies — says Daniel Bittencourt, director of Abla in Rio, who highlights the focus on individuals, remembering that there is also a demand for companies.

Popular with younger people

The customer profile varies. At Unidas Livre, men over 30 are the majority — which also prevails at Flua!. At Localiza Meoo, almost 80% are men between 36 and 45 years old, with income above ten minimum wages (R$ 13,020) and residents of the South and Southeast regions. At Renault On Demand, they are young people between 35 and 40 years old, while the majority of Movida customers are between 20 and 35. At UseCar, 70% are men between 35 and 40 years old.

— There is a lot of talk that the preference for use over ownership is from generation Z, but most customers are from generation X. They already had the pain of having their own car and now they want the balance between convenience and mobility — says Glauco Zebral, director of Meoo.

This market vision is endorsed by Felipe Zogbi, Movida’s long-term commercial vice-president. He explains that the main profile of those looking for a rental company for this type of service is those who had access to credit for financing denied or those who prefer to give up their own car, invest the money and use the proceeds to pay off part of the monthly fee.

The most popular cars are economical and SUVs, such as the Volkswagen Polo, Fiat Argo and Mobi, Renault Kwid and Duster, Jeep Compass and Renegade and Volkswagen T-Cross. And old rental companies in the market dedicate a considerable portion of their fleet to the service — at UseCar, it reaches 40%.

— Recent studies show that total subscriptions should more than triple in the coming years and that subscribing to a car costs, on average, 40% less than buying it via financing and 20% less than purchasing it in cash, considering insurance, maintenance, taxes and depreciation costs — says Glauco Zebral, director of Meoo.

Focus on other consumers

To meet the tightest budgets, the market for used car rental companies is also growing, with the expansion of the used vehicle fleet, evaluates Daniel Bittencourt, from Abla. He believes that this segment will be a trend for 2023, with a focus on consumers in the C and D classes.

— In the same way that you have the public that seeks used cars for purchase, rental companies are shaping up to offer used cars in subscription plans — he analyzes.

There are also opportunities for those who, with an eye on more advantageous prices, opt for used models. This is the case of Carflip, a start-up created in 2021 to serve people who had the process of obtaining credit denied in the traditional financial system.<

It works like this: the company offers used car rental services with up to eight years of use in contracts ranging from 12 to 24 months. If the customer wants to buy the vehicle later, Carflip offers a discount of around 8% on the model, compared to the market value. In some of the rental companies, there are even special conditions for signing vehicles for application drivers.

Subscription is more advantageous for the pocket

Practice, the signature can also be advantageous financially. That’s what calculations made by Ibmec-RJ Accounting Sciences professor Paulo Henrique Pêgas show, at the request of EXTRA. Simulations, with the lowest values ​​for models available on Renault On Demand, Flua! and Localiza Meoo show that rent weighs less than financing. For Pêgas, the subscription can be useful for those who don’t drive a lot — drivers who live close to work or are at home office. It also points to the advantage of predictability in family accounts, as they have a fixed amount.

He compared the total subscription price with the financing of the same model, considering the same number and value of installments in both scenarios, and interest of 2.2% per month on financing (market average).

In the case of financing, there is still a down payment equivalent to the difference between the total amount financed and the market value of the vehicle. Expenses with IPVA also enter into the account – with the rates of 4% for flex-fuel cars – and insurance – also 4%, according to the market average.

Pêgas reinforces that “it will always be more expensive to own the car”, as it involves costs with taxes and maintenance, much more recurrent in own vehicle, with the time of use. On the other hand, it is necessary to weigh the mileage to travel per month, the subscription — the plans vary from 500 km to 4 thousand km — and the belief about the purchase of the good.

— The subscription can be useful for anyone who works at home office, hybrid model or who travels a little to get to work. In a plan of 500km/month, for example, the limit of use would be 16km per day. For those who like to travel by car, it is no longer useful – he analyzes.

Another element that should be considered in the case of subscription is predictability in the family budget, points out the professor. As most rental companies have full service coverage, the customer would only be concerned with paying the monthly fee. Already with your own car, you must have planning for unforeseen costs, such as maintenance, repairs and even vehicle exchange.

On the other hand, those who choose to buy a car, despite the expenses and the annual devaluation of the asset, have assets that can be turned into cash, in case of sale, even if there is a loss of value over time.

See the conditions

Find Meoo

The monthly fee includes preventive and corrective maintenance, breakdown repair management, towing with national coverage, 24-hour assistance, inspections and payment of registration, taxes such as IPVA and other fees. The insurance also covers damage to third parties. The rental company also offers an advantage club for customers, with discounts on establishments and services.

Free United

To subscribe, the customer must have a “B” driver’s license and a valid credit card. The contract coverage includes documentation expenses, taxes, total vehicle protection, in addition to scheduled maintenance expenses. Only maintenance and replacement of parts due to misuse are excluded from the contract. The insurance includes full protection, including theft or theft of the vehicle and damage, such as those caused by natural events such as flooding, hail and falling trees. Damage to third parties is also covered.

Renault On Demand

The subscription includes expenses with documentation, taxes, revisions, corrective maintenance, 24-hour assistance, reserve mobility. The company’s insurance covers the client in case of robbery, theft, accidents and damage to third parties. With extra payments, it is possible to cover up to three monthly installments in case of dismissal, and the deductible insurance that exempts the client from the insurance deductible in cases of activation.

Flow!

The monthly fee covers insurance and IPVA payments, maintenance and residential assistance. In addition, the insurance includes coverage for damage to third parties, total loss and other claims and a spare car (according to the contract and established deductible values).

Carflip

The price of the subscription at the rental company specializing in used cars covers insurance, maintenance, dispatcher and 24-hour assistance. In addition, with each monthly fee paid, the customer accumulates up to 25% cashback that can be used to purchase the leased vehicle.

Moved

The monthly fee covers insurance and preventive and corrective maintenance, which can be activated digitally, on the company’s platforms.

UseCar

The subscription price covers maintenance provided for in the automaker’s manual, insurance, repair of damage to third parties and unlimited spare car, delivered up to 48 hours after ordering.