Car subscription services
Want ongoing access to a car without the costs of ownership? Compare car subscription services now.
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Traditionally when you wanted to buy a car, you would need to purchase it using finance, cash or through a lease.
Now, there’s another option for private car buyers: a subscription service. Think of it like Netflix or Amazon Prime, but for cars.
How does car subscription work?
Instead of buying or leasing a car, a car subscription service lets you pay a regular fee to use a car. Your subscription fee generally covers the vehicle rental, registration, insurance, maintenance and assistance. You will have to cover the cost of fuel and may be charged additional usage fees, depending on the service.
Most car subscription services charge per week or per month and allow you to cancel your subscription at any time, as well as exchange your vehicle for a different one when you want. That means if you were to go on a two-week road trip taking in some rough tracks and terrain, you could swap your sedan for an SUV for the month. This may suit drivers who don't want to commit to any particular type of car for lengthy loan terms or need access to a variety of vehicle types.
There are a number of car subscription startups in Australia, while some manufacturers and dealers also offer subscription services.
Compare car subscription services in Australia
|Provider||How it works||Where it's available||Cost||Eligibility|
|Carbar||You pick the model you want and choose from either the CRUISE or SHIFT plan.|
The SHIFT plan lets you change car for free once every 3 months or $150 every additional time. You can't change cars on the CRUISE plan, but are free to cancel the subscription at any time, with two weeks' notice and then get a new subscription with a different car.
|Sydney, Melbourne||From $129 per week|
You will also need to pay a refundable insurance bond on the SHIFT plan, or a non-refundable set-up fee on the CRUISE plan.
|You will need to provide:|
|Carly||You choose your first car and can then switch cars when you wish. You get up to 3,600km free each month, but can upgrade your monthly limit when you start your subscription.|
The service can be cancelled at any time after the first 30 days.
|Sydney, Melbourne||From $115 per week, depending on model and usage|
|HelloCars||You can choose your first car and then choose from the Economy, Cruise and Explorer plans.|
You're free to swap cars every 90 days on the Cruise and Explorer plans or can pay $350 each swap at any other time. The minimum subscription period starts from 30 days on the Explorer plan.
You get 175km free per week on the Economy plan or 650km per week on the foundation membership.
|Sydney and interstate (on a case-by-case basis)|
There is a $399 joining fee on the Economy plan, as well as a $500 refundable security deposit on all plans.
|Motopool||Customers can access three different pools: Premium, Value and Starter, which each contain different models, usage limits and delivery system.|
Customers can change cars up to three times per month, with three days' notice, which can then be picked up on the Value or Starter plans, or delivered to you on the Premium plan.
There is also a $250 joining fee
Will I save money on a car subscription service?
That really depends on several factors, including:
- How far you travel per year by vehicle. Drivers who travel way above the national average of 15,000km annually may save money. The more you drive, the more a vehicle will depreciate in value. As you clock up the kilometres, a vehicle's mechanical components wear out at an accelerated rate. You'll speed through service intervals and a car will need more work at each service interval.
- The kind of car you drive. The style of vehicle you drive may also make a car subscription more financially viable. Specifically, premium vehicles that depreciate rapidly have higher maintenance, insurance and servicing costs and are slugged with higher luxury car taxes. These types of vehicles may be more cost-effective through a subscription service.
- If you commute by public transport. You could save if you commute to work on foot, by bike or using public transport. In theory, you could then subscribe to a service only for the months where you need a car. Suppose you went 10 months per year without a car, you'd spend less than if you had to maintain, insure and register a car that sat on your driveway 90% of the time. With that said, several subscription businesses require users to commit to minimum 3-,6- or 12-month blocks.
What are the advantages of using a car subscription service?
Why would anyone want to sign up to a car subscription plan? What are the advantages of doing so?
- Flexibility. You can change your car if you need a specific type of vehicle or simply for variety.
- Breakdown/customer care. Most subscription services include roadside assistance, 24/7 customer care, in-car connectivity with the car company and emergency services plus onboard Wi-Fi/4G.
- Hassle-free. With the service provider taking care of all the typical car costs, all you have to do is pay your monthly fee and fill up the fuel tank.
- Try a car long-term. Suppose you want to buy a sports car or luxury vehicle, that's a big purchase. Using a subscription service, you can try the exact model you're interested in over an extended period, giving a true-to-life impression of what a car is like to own.
- Peace of mind. Running a new car means a warranty covers you, so you generally won't have to worry about any unforeseen repair bills.
What are the downsides of signing up to a car subscription service?
Like anything in life, there are always downsides to consider as part of your decision.
- Harder to add additional drivers. Adding an extra driver requires the pre-approval of the subscription company, complicating the matter if you need a friend or family member to drive the car in an emergency.
- Could cost more than traditional financing options. Though we don't have any fixed prices and definite commitments for car services opening in Australia yet, it's likely they'll cost more than traditional car financing unless you fit into the above money-saving scenarios outlined above.
- You're paying depreciation on a car you don't own. Car companies aren't non-profit organisations, so they'll pass the value of depreciation and maintenance onto you, packaged into your monthly sum. Once they're done with the car and come to sell it, they'll maximise their profits because you footed the devaluation bill.
- Deposit/membership fees. Some of the car subscription programs require a sizeable deposit and or membership fee to join.
- Mileage/usage limitations. It's likely services will apply yearly kilometre limits and possibly restrict the driver to private use only with no business or commercial trips allowed.
- Limited model choice. Car manufacturers are limiting the models available as part of subscription plans while they conduct viability evaluations.
- GPS tracking. To verify how many kilometres you've travelled and also when and where you're journeying to, you might have to carry a location-tracking device. This also covers the company if the car is stolen or your billing method defaults.
- Cars may not be new. Although car manufacturers will no doubt supply you with a new or nearly new model, some of the startups may have a fleet of older cars that are up to 6 years old and have over 100,000km on the clock.
Picture: Getty Images
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