With the popularity of subscription services for music and movies on the rise, it's only a matter of time before the way we look at using our car goes the same way. The younger generation is already exploring alternatives to car ownership and we're having a closer look at the options.
According to a survey by subscription service provider Loopit, the younger generation Australians no longer sees value in tying up their cash in a new car. Paying interest on a depreciating asset doesn't interest them anymore and as subscriptions are now available for most other services, they are also looking for this as a flexible alternative to car ownership. The same goes for investing in real estate though, as millennials rather put their money in the share market and cryptocurrencies.
The survey said that 68 per cent of young people would consider a car subscription service compared to 46 per cent of older Australians.
Loopit co-founder and managing director Michael Higgins said: “Younger Australians are intent on making their money work harder, simply because they have no other choice.”
“The idea of paying interest on a car loan over five years for a depreciating asset just doesn’t stack up anymore for our generation like it did for the Baby Boomers,” he said.
Considering that 85 per cent of respondents to the survey who were motorists were underestimating the real cost of owning a car by as much as $5000 a year it made it clear that there is a misconception that buying a new car through traditional means like finance or an outright purchase is the most affordable way to get behind the wheel. “Many car owners and buyers use ‘back of the napkin’ math when estimating the cost of car ownership,” Micheal Higgins said.
Once you consider interest, loan repayments, fuel, insurance, maintenance, servicing, registration and depreciation – it all adds up to actually own a car. Even in a straight apples-to-apples comparison, car subscription services like Motopool are quickly becoming the more affordable way to get behind the wheel of a new car. Especially considering that the latest Australian Automobile Association Transport Affordability Index shows transport costs have exploded in the first quarter of 2021, increasing by over $2000 on average since last year. The average weekly cost of owning a car was $354 or almost $18,500 a year.
For that amount Motopool offers you a ute like the Mitsubishi Triton, for under $200 you'll get an SUV like the Kia Sportage or for less than half the price a compact car like the MG ZS. An interesting proposal to explore.
Motorama have one of the largest selections of quality pre-owned cars for sale in Brisbane. If you are in the market for a second hand car, we will have the right car for you at.
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bring your car to us for a no-obligation quote.