Need a car but don't want to commit to a long-term car loan or traditional lease? A car subscription can offer a more flexible way to access a vehicle, particularly for Australians who only need a car for a shorter period or whose circumstances may change.
But before signing up, it's important to understand what a car subscription is, how it works, what's included and what you're actually committing to.
How Do Car Subscriptions Work?
A car subscription allows you to use a vehicle for an agreed period in exchange for regular payments. Unlike buying a car with finance, you don't take ownership of the vehicle. Instead, you pay for access to the vehicle under the subscription agreement.
The exact process varies between providers, but it generally works like this:
1. Complete an application
The first step is to submit an application and provide the information required by the provider. Eligibility and verification requirements still apply, even where traditional credit checks aren't part of the process.
2. Choose from available vehicles
Once your application has been assessed and you're eligible, you can select from the vehicles available to you. Availability can depend on the provider's current vehicle stock, location and your requirements.
3. Review the subscription terms
Before committing, check the weekly payment, upfront amount, subscription period, included kilometres, insurance arrangements and other conditions.
4. Start your subscription
After completing the required steps and payments, you can arrange to receive your vehicle and begin the subscription.
The process can be more straightforward than purchasing a vehicle, but it's still important to understand the agreement before signing.
What's Included in a Car Subscription Plan?
One of the main attractions of a car subscription is that several common vehicle costs can be bundled into one regular payment.
A typical car subscription fee can vary significantly depending on the vehicle, subscription term, kilometre allowance and what's included. A lower weekly price may not necessarily represent better value if registration, insurance or servicing are charged separately.
Depending on the provider, a subscription may include:
- Registration
- CTP insurance
- Comprehensive insurance
- Scheduled servicing
- Roadside assistance
Fuel, tolls and other personal driving expenses are generally separate.
For example, CarCoop's advertised three-month subscription offering includes registration, CTP insurance, comprehensive insurance, scheduled servicing and roadside assistance. Selected vehicles are advertised from $239 per week, with an $830 upfront payment and up to 7,500 km included over three months.
When comparing car subscription plans, look at the complete package rather than focusing only on the weekly payment.
What to Check Before Signing a Car Subscription
A subscription can provide flexibility, but the details of the agreement matter.
Check the upfront cost
Don't look at the weekly payment in isolation. Find out exactly how much you need to pay before receiving the vehicle, including any upfront payment or other applicable charges.
Understand the kilometre allowance
Many subscription agreements have a specified kilometre allowance. Consider how much you normally drive for work, commuting and personal trips.
For example, someone travelling long distances every week could quickly exceed an allowance that works perfectly well for a city driver.
Review the insurance
If insurance is included, check what type of cover applies and understand the excess, driver requirements and exclusions. Don't assume that "insurance included" means there is no potential out-of-pocket cost following an incident.
Check the minimum term
One of the biggest differences between subscription providers is the length of the commitment.
Some options can be considerably shorter than traditional leasing arrangements. A three-month subscription, for example, may be useful for someone who needs a vehicle temporarily rather than for several years.
However, always check the conditions for ending the subscription early.
Know what happens at the end
Find out whether you return the vehicle, renew the subscription or have the option to select another available vehicle.
You should also understand any requirements relating to the vehicle's condition when it is returned.
Car Subscription vs Car Finance and Leasing
A car subscription isn't automatically better than traditional finance or leasing. It simply works differently.
Car finance is generally suited to people who want to purchase and eventually own their vehicle, although the loan creates a longer-term financial commitment.
Car leasing provides vehicle access without necessarily requiring ownership, but lease agreements can involve longer commitments.
Car subscriptions are designed around vehicle access and flexibility, often with shorter terms and bundled running costs.
For someone who expects to keep the same vehicle for many years, ownership may make more sense. For someone who needs a vehicle for a shorter period or wants more flexibility, a subscription may be worth considering.
Who Could Consider a Car Subscription?
Car subscriptions can be useful for a range of Australian drivers, including people who:
- Need a vehicle for a shorter period
- Don't want a multi-year finance commitment
- Are self-employed and have changing vehicle requirements
- Want several vehicle costs bundled into one payment
- May not qualify for traditional car finance
For drivers who have limited or poor credit history, a subscription can also provide an alternative to traditional finance. However, alternative access doesn't mean automatic acceptance. Eligibility and verification requirements still apply.
Final Thoughts
A car subscription can provide a practical alternative to buying or financing a vehicle, particularly when flexibility and a shorter commitment are priorities.
Before signing up, don't just compare weekly prices. Check the upfront payment, subscription term, kilometre allowance, insurance, inclusions, eligibility requirements and early termination conditions.
If the terms fit your driving needs and budget, a subscription can be a convenient way to access a vehicle without taking on a traditional long-term finance commitment.
Frequently Asked Questions
What is a car subscription and how does it work?
A car subscription allows you to use a vehicle for a specific period in exchange for regular payments, without taking ownership. You'll complete an application, choose a vehicle from available options, and review the subscription terms before starting your subscription.
What costs are included in a car subscription?
Car subscriptions often bundle several costs into one regular payment, including registration, CTP insurance, comprehensive insurance, and scheduled servicing. However, expenses like fuel and tolls are typically not included, so it's essential to review the complete package before signing up.
How long can I subscribe to a car?
Car subscription terms can vary significantly by provider. Some companies offer short-term options like three-month subscriptions, while others may allow for longer commitments, making it important to check the specific terms of each provider.
Is insurance included in a car subscription?
Insurance can be included in a car subscription, often covering CTP and comprehensive insurance, along with registration and servicing. It's crucial to understand the specifics of the insurance policy, such as the type of coverage and any excess or exclusions.
Can I get a car subscription if I have poor credit?
Yes, a car subscription can be a viable alternative for individuals with limited or poor credit, as traditional credit checks may not be required. However, applicants still need to meet certain eligibility and verification requirements set by the provider.
What should I check before signing a car subscription agreement?
Before signing, review the upfront costs, subscription term, kilometre allowance, insurance details, and conditions for early termination. Understanding these factors ensures that the subscription aligns with your driving needs and budget.
How does a car subscription differ from traditional leasing or financing?
Car subscriptions focus on flexibility and shorter terms, allowing access to a vehicle without the long-term commitment of leasing or financing. While leasing often involves longer agreements and potential ownership, subscriptions offer a more adaptable solution for those needing a vehicle temporarily.
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