Car subscriptions – the latest disruptor to the car industry

Heard about car subscriptions but not sure how they work?

Good news: the mechanics of this latest disruptor to the car industry are fairly straight-forward.

Anyone who has used a vehicle leasing arrangement or taken out a long-term car rental will find there are similar benefits to be had from a car subscription.

There’s no need to buy a car – so no car loan expenses – and registration and roadside assistance costs are covered.

Like a leasing arrangement comprehensive insurance and maintenance are included and there’s a range of vehicles available. If you’ve always wanted to drive an Audi or an MG, you can. Or if you’re hankering to try driving an electric vehicle they are among the options.

You simply sign up to the subscription service and pay the weekly cost of your chosen vehicle. For example, a 2018 Toyota Yaris might cost you $152 per week. At the upper end of the range a 2021 Jeep Gladiator might set you back $723 per week.

The stand-out difference offered by subscription services – such as Carbar and Subscribacar – is, there is no lock-in contract and no cancellation fees. If you want out, you just have to provide the required notice and arrange to return the vehicle.

Unlike car-sharing schemes you don’t have to book the car. It’s yours to use exclusively whenever you like; and you can swap cars too.

Pick-up and delivery of the vehicle are usually part of the deal. But fuel and toll costs are generally the subscriber’s responsibility as are any parking or speeding fines you incur while driving the vehicle.

If your car is out of action because of an accident or maintenance, you can have use of another car from the subscription service.

For anyone who needs a car for work the services can offer a way to manage cashflow by side-stepping the upfront cost of buying your own vehicle.

The subscription services are available for business use – vehicle options include utes for tradies – and people working for ride-sharing services.

If you want to understand more about how car subscriptions work or compare services, here are 10 points to check before signing up:

1. Is there an upfront or joining fee? Are there any other fees?
2. Who can subscribe? Learners and under 21s, anyone who has lost their driver’s licence or made claims on their insurance in the past five years are among those people not likely to be eligible.
3. What documentation is required to subscribe?
4. Is your preferred vehicle available and what is the weekly cost of that vehicle?
5. Can a fuel and toll bundle be added to the subscription cost?
6. Is there any limit on kilometres you can travel? If yes, what is the charge for excess kilometres?
7. How much notice do you need to give if you want to cancel your subscription?
8. Can someone else drive the car as well?
9. What is the insurance excess payable in the event of an accident?
10. Are there any loyalty benefits if you subscribe for more than 12 months?