Car Subscription Plans: Are They Right for You?
Posted by: Lydia on 26/03/2019
Modern life in Australia is rapidly changing the way in which we live, work, and play. As so many of our cities grow in population, many people now happily cycle to work a couple of days a week and leave the car at home. Others may still take a car, but use a taxi or the services of a ridesharing app.
These options are good ones, but there’s also another option out there - and it's really fun, especially for Aussies who may use their car only now and then (and even wonder if they need to own a car at all). This option, car subscription plans, has become popular overseas, thanks to their variety and the flexibility they offer a driver.
But are they right for you? Let’s look in-depth now at how car subscription plans work, as well as some of the manufacturers offering their wheels for hire.
The costs of car subscription services
While car subscriptions remain a new phenomenon in Australia, a number of providers have established solid foundations overseas. European brands like Volvo, BMW and Porsche have thrown their hats into the ring, alongside icons like the USA’s Cadillac and the UK’s Jaguar.
As keen readers will note, these brands are unquestionably fantastic - but also in the luxury segment. This is part and parcel of the car subscription concept. Although there are car subscription services out there like Australia’s Carbar that offer more economical vehicles, such as the Honda Accord, consumers can expect to pay more for the convenience of subscription over the long term value of ownership.
Indeed, Caradvice found that the difference between buying a 2013 Honda Accord versus renting it with Carbar would result in a subscriber paying on average $6992 more per year after initial purchase.
And it’s not only the ongoing costs that are a factor in this equation. Because the resale value of a car is important to most people who buy a new vehicle, weighing up whether losing out on this financial incentive altogether by using a subscription service should be a critical consideration for drivers.
In some circumstances, resale value may not be a big deal. Drivers may be happy to make use of a car for a short time without having to go through the process of buying and selling the vehicle. But since, for most Australians, buying a car is a big financial outlay, it’s wise to think ahead and consider whether making some money back on resale in years ahead will be important to you.
Additional benefits and expenses
There are certain aspects of car ownership that a car subscription will take care of for you. Despite this, there will still be some additional expenses that you shall be expected to cover. While every car subscription plan varies and you may be able to swing a discount or two along the way, ultimately it’s important to factor in not only the subscription costs, but what comes with them.
In general, you can expect a car subscription to cover insurance, roadside assistance, and general maintenance costs. You’ll still be expected to pay for fuel and, depending on your specific subscription agreement, you may need to cover additional expenses like toll road passes, car washes, and minor maintenance goods like coolant as well.
Evaluating car subscription agreements
When evaluating car subscription agreements, consider any restrictions placed on the car’s return. Just as returning a hire car comes with the expectation that you’ll have either vacuumed it or be ready to be charged a cleaning fee, similar conditions can apply with a subscription car.
Though a little general wear and tear can be expected should you own the car for a substantial period of time, any damage the car sustains that isn’t covered by general maintenance may ultimately require you to pay out of pocket to restore it to a pristine condition. This is a real downside compared to regular ownership of a car, as most drivers won’t worry about such minor wear and tear.
It’s also a good idea to check out how many cars the subscription service has in the fleet, as well as how regularly they’re available. On paper, a subscription service may look great if it gives you access to a range of models in a manufacturer's stable. But if, in practice, most of the range is booked out - leaving you with just one or two options - you may feel disappointed that the variety you signed up for isn’t regularly available.
In circumstances like this, it could be better to just buy a car outright, and then occasionally hire a cool car on the weekend when you want to experience a new ride for a while.
Is it value for money?
If you know for sure you only need a car for a short period of time and don’t wish to go through the hassle of buying and selling, then it's possible a subscription service could be for you. What’s more, if you’re the sort of driver that’s decided to buy a vehicle from a particular manufacturer, a subscription can be a great way to test out a range of autos in the fleet that goes beyond a quick test drive with the local dealership.
On the other hand, if you’re someone that has a clear car in mind they’d like to buy or who needs the future option to resell a car and recoup some investment, a subscription may not be ideal. You may also find it a struggle to buy and budget for a new car if you’d like to own one outright if you also currently have a subscription.
If for this reason or any other you find the idea of renting over buying impractical, a subscription service is unlikely to be the best fit for you.
Have you tried a car subscription? If so, what has your experience been like? Let us know in the comments below!