It’s the old argument: Why buy a book when you can join a library? Okay, the concept of a car subscription service isn’t quite that simple, but that, right there, is the nub of it. Effectively, you pay to borrow a car for an extended period of time rather than buy or lease a car which you then own.
Why would you do such a thing? Possibly because you’re living or working in a new place for a few weeks or months and don’t want the chores of buying and then selling a car when you move away again. Maybe you just don’t want the hassle of these transactions. Car subscriptions also give you the option of paying for everything up front including all running costs (insurance, registration, roadside assistance and, of course, depreciation) in one simple payment, rather than play the paper chase game yourself. Some car subscription companies also allow you to swap your city-based hatchback for a seven-seater when you need to. And when you’re done with the car, you simply return it.
These days, there are specialist companies offering car subscriptions. Names such as Carly, Carbar, Hello Cars and Blinker (which everybody thinks is Blinkers) are all names you’ll be seeing more of soon. Some car-makers (mainly overseas) also offer a car subscription service as opposed to outright purchase or leasing, and some traditional car rental companies are eyeing up the subscription market.
At the moment in Australia, car subscription operations are mainly out of the major capitals such as Sydney, Melbourne, Brisbane and Perth, but it’s a growing network, so you might see them in regional centres before too long. Ultimately, though, for a company offering a car subscription Australia is a big place with lots of population gaps. Expect smaller, individual operators to fill those gaps eventually and in the meantime, google `car subscriptions near me’ as your first step.
Who does this work for? Anybody who has ever needed a car, really. It’s simply an alternative way of gaining access to that car. Clearly, though, there are clear benefits for workers on the move and those who need a range of vehicles rather than a one-size-fits-all vehicle.
So why does car subscription vs buying work? Well, it’s because it’s convenient, and the same applies to car subscription vs lease. Fundamentally, the car is yours. Unlike car-sharing schemes, you don’t share it with anybody. Neither do you need to stump up a huge sum of cash or find finance as you would if you were buying the car, and when you get rid of the car, you’re not wearing the depreciation inherent in most cars when they go from new to second-hand. You can also opt in and out of the subscription as your needs change.
On the downside, you might be limited for choice in what car you get. Certainly, it’s not guaranteed you’ll be offered the exact car you want in make and model terms, but since it’s a car loan, not a car own, who cares whether it’s a Hyundai or a Kia, right? You might also find that your subscription provider doesn’t always have the type or size of car you want. Some providers will want a credit check before handing over the keys, and you credit rating will cop a bruise if you fail to miss a scheduled subscription payment.
Different providers have different methods, but most times, you’ll find the company nearest you online and then place an order. Once you’ve downloaded the company app, signed up and paid to subscribe and gain approval you take delivery of the car (some will deliver to you) and drive it for as long as you need it, paying on a (usually) weekly basis. Some will ask you for a deposit up front, but a no deposit arrangement is possible depending on the company.
The cost varies according to how much car you need, but figure on a plan of less than $150 a week for a small city car and as much as $500 a week for something luxo. A seven-seat SUV is likely to be somewhere between $200 and $300 a week, but remember, those plans cover everything bar fuel. Obviously, if you want to switch from a hatch to an SUV for a week, the price will vary accordingly. Different companies might also offer a variety of plans based on how you want to use the car and what sort of weekly or monthly distances you’ll be covering.
Check out the terms and conditions carefully, though, as not all providers are created equal. Some charge a joining fee, others don’t. Some don’t demand a credit check (handy if you’ve ever had a bad credit rating) and others will deliver and pick-up the car. Short-term cancellation is another issue, and while some don’t care, other companies require 30 days’ notice of your intention to quit the deal. The fine print will be the key to knowing which is best for you. Don’t forget, there will also be a list of dos and don’ts that apply to the car and how you use it. Ignore those and you could quickly be in breach of contract.
Different providers also have different requirements for you to join. In some cases you need to be at least 21 years of age and have held a full drivers license for a defined period of time. You’ll probably also be asked if you’ve had any license suspensions or cancellations or infringement notices within a set period of time and you’ll probably also be asked for 100 points of identification.
By David Morley