You might have heard of the term “the Netflix of cars” or some of the recent media attention around this new way to get into a car called Car Subscription. With the changing nature of how consumers look at ownership and how they access services – the automotive industry is no different and as such has seen a rise in the popularity of Car Subscriptions.
Car subscriptions work similar to most other subscriptions out there on the market such as Netflix or Spotify. Quite simply you pay a weekly fee which gives you access to the service. The service in this case just happens to be a full maintained car that you treat like your own.
Your subscription includes everything to do with the vehicle and all of the traditional running costs of a car. That is registration and stamp duty, servicing, tyres and maintenance, roadside assistance as well as fully comprehensive car insurance for your peace of mind. The only costs you are up for outside of this is the fuel and tolls if you choose to use them.
Car Subscription is a flexible alternative to car ownership with one of the biggest draw cards being that the minimum terms start at just 2 months giving you the ultimate flexibility.
Traditional car ownership is a big commitment whether you choose to use your own hard earned cash to shell out for a car, or you decide as many Australians do to finance a car. You’re locked in for a long term with most finance terms being 4-5 years and even though you can always get out, or sell your car, it can be quite a costly exercise to do so. If your someone who knows what the next 5 years plus holds and unlikely to change cars or have any major life changes, then ownership can work well.
On the other hand with a Car Subscription comes the ultimate flexibility. With many people uncertain of what the future holds and also not wanting to commit to one type of car for that long a period, subscription becomes a great option. You can get the flexibility of not being locked in for a long term, if your needs change you simply hand the car back. Many people also enjoy the ability to changes cars as their lifestyle needs change – you may find that the small hatch no longer has enough space for a growing family and make the switch to a mid-size SUV. Car Subscription allows you the choice to do this with ease.
With car ownership comes the responsibility of taking care of your car. There’s the ongoing maintenance and servicing of your vehicle, along with replacing tyres and any of those other unforeseen expenses that can arise from owning a car. Coupled with the annual expenses you need to allow for including registration, insurance and roadside assistance it’s no wonder some people can’t be bothered.
A Car Subscription gives you all the benefits of car ownership with none of the hassle or costs of the ongoing maintenance. Your car subscription includes all the additional costs associated with your car and the management of servicing etc. so that you can just focus on enjoying the ride.
By now you’re probably thinking it sounds too good to be true, what’s the catch? We’re not going to tell you that a Car Subscription is cheaper than owning a car and throw out some crazy figures we have put together trying to show this.
The reality is that if you are a long term car owner who looks after your car then ultimately you’re going to pay less over the long run then if you had a Car Subscription. There are many ifs though…
For instance the biggest “hidden cost” of car ownership that many people forget to factor into their workings is the depreciation. This is because it is not an expense that you see coming out of your bank each week like finance payments or your annual insurance bill. This is the cost you wear at the end of your ownership when you decide to sell the vehicle and lose money.
A Car Subscription covers your depreciation cost meaning you don’t have to worry about the used car market or what the value of your car is. In fact if you are someone that does like to change cars and you did decide within a year of purchasing a car that you want to sell and change cars – then would in fact find that after all the associated expense of the car and potential downside on value when you sell – that Car Subscription would have been a better economical solution for you.
Similarly if you’re someone who only used or needed a car for 6 months of the year yet you were paying to hold a car for the full year, you might find that a Car Subscription actually works out cheaper for you.
In some cases Car Subscription can work out better for you depending on your circumstances, but even when it doesn’t you have to consider what you get for your money and the freedom, flexibility, convenience and experience of trying a Car Subscription.