A guide to vehicle subscription services
Thinking about a car subscription, but not sure what it actually includes or how much it costs? We break it down.
By Shell on Jan. 11, 2022
Car ownership is changing. While many of us still make a full-time commitment to a car through purchase or a lease, a growing cohort of Australians are forgoing car ownership altogether. In the middle is another growing segment of the population who are choosing only to have a car when they really need it via a vehicle-subscription service.
What are they?
The concept is simple – pay a recurring subscription fee for access to a car. Most providers will allow you to subscribe for as little as a week or two but you can ultimately have the car as long as you need it and cancel the service when you don’t, with appropriate notice.
Different providers offer different packages but you can typically choose different car sizes, body types and brands, both new and used. Traditional car-ownership costs such as registration, servicing, insurance and roadside assist are all taken care of, so – subscription fee aside – you only need to pay for the fuel you use and any user charges such as tolls.
How much do they cost?
Most services typically start from $100-odd per week for a small, not quite brand-new car and go up to $700 or more per week for something newer, bigger, and more powerful and prestigious.
Take the Melbourne-based vehicle-subscription company Carbar, which was established in 2016 and is majority owned by IAG. It was offering everything from a 2017 Kia Rio for $138 per week to a 2021 Jeep Wrangler for $730 per week as this was written. Its long list of possibilities also includes electric-vehicle (EV) options from $279 per week.
The weekly fee, though, might not be the only cost you incur. Some services charge an upfront membership fee or ask for a deposit at the start of the term. Others might have new-car levies or cancellation fees, or might waive the latter but not refund unused portions of a cancelled deal, so read the fine print closely.
The pros
If you only need a car occasionally but for a longer term basis than your typical car rental, a vehicle subscription could be right for you. In return for forking out on a membership fee or deposit, you may well access cheaper weekly rates than an equivalent long-term rental.
Many services also allow you to switch between different cars, giving you more flexibility than traditional car ownership – for example, you could have something small and economical for A-to-B stuff and change over to a big 4WD for a couple of weeks for the annual snow or road trip.
Signing up to a subscription can be as easy as signing up for Netflix, with most providers allowing you to complete the transaction completely online and sometimes even have the car delivered.
The cons
If you're essentially using a car full-time, a traditional purchase or lease may well be better for your bottom line, so do all the sums for each option or seek financial advice before making a decision.
Just like a lease, you won't own the vehicle and will be bound by various restrictions. You won't be able to make modifications to it, other drivers could be prohibited from using it and there could be usage/kilometre limits and additional fees to pay if you breach them.
While vehicle offerings across the industry are broad, you might not be able to choose your dream car like you could with a purchase or lease. With most providers city-based, a subscription might not be possible if you live regionally.