Car subscription services in Australia

If you need a car regularly but don't have anywhere safe to park it or want to avoid the costs and hassles that come with owning a car, you could consider a car subscription service.

With these services, you pay a regular fee to use a car. Each service has its own eligibility criteria, costs and choice of cars.

How does a car subscription work?

A car subscription service lets you pay a regular fee to use a car. Your subscription fee typically covers the vehicle rental, registration, insurance, maintenance and assistance. You typically have to cover the cost of fuel and tolls and may be charged additional usage fees, depending on the service.

Most car subscription services in charge a fee per week or per month and allow you to cancel your subscription at any time. You'll typically have a choice of cars through the subscription. You may also have more options if you're in a major city such as Sydney or Melbourne, compared to smaller cities or regional areas.

There are a number of car subscription startups in Australia. Some manufacturers and dealers also offer subscription services.

Compare car subscription services in Australia

Will I save money on a car subscription service in Australia?

That depends on several factors, including:

• The distance you drive per year. Drivers who travel way above the national average of around 13,000km 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 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.