B
y 2025,1.9millioncarsonAustralian
roadscouldbesubscriptioncars.That’s
10%of thecountry’scurrentroadfleet,
andalmostfourtimesthe515,472private
vehiclessoldin2018.
Even if you halve that optimistic prediction by Forbes,
it’s going to require a revolutionary shift in how Aussies
view the ownership of their cars, which have long been
seen as the second most significant purchase after the
family home.
So what is car subscription and how does it differ
from buying or leasing?
For car enthusiasts, the annual expenses of owning
a special car are like any other part of a hobby or
passion. But it’s a different story for people who view
their car as a necessary appliance and prefer not to be
bogged down by registration, insurance, finance and
maintenance costs, as well as associated inconvenience
and paperwork.
It’s the discerning but time-poor driver that a number
of vehicle brands and third party providers are targeting
with Netflix-style subscription services, which allow you
to swap your vehicle according to your lifestyle, without
the commitment of ownership or finance contracts.
The format varies from brand to brand but each
service revolves around the same principle. For a
weekly, monthly or annual subscription, customers
have access to a range of models. If, for example, the
subscriber is off to the snow for the weekend, they
might request a large SUV to cart around people and
kit. Back home, a smaller passenger model may be
more practical to live with for the daily commute and,A Netflix-
style
service
allows
you to
have a car
without the
ownership
and
financial
hassles
Along
for the
easy ride
STORY
DAVID
BONNICI
MY MONEY CAR SUBSCRIPTION
occasionally, there could be a convertible or something
a little more rewarding to drive on a summer weekend.
Not to be confused with car-sharing schemes that, for
a membership fee, allow you to rent a vehicle when you
need it, car subscription is a little like a mobile phone
plan in which all costs are covered by one monthly
payment but it allows you to change the handset when-
ever you like.
Of course, the service comes at a price, but for many
users the fee may be less than their ownership costs.
When all associated costs are factored in, includ-
ing finance, registration, tax and maintenance, the
subscription may be the most cost-effective solution,
particularly if a customer is able to replace more than
one car as part of the plan.How much it costs
Car subscription is still in its infancy in Australia but
there are already a few services such as Carly, FlexiGo
and Carbar that offer affordable options using new and
used cars from a wide variety of makes, models, sizes
and powertrains, including electric vehicles.
Carly and Carbar compare their services to Netflix
in that there are lock-in contracts and you can cancel
at any time, subject to a relatively brief notice period.
Using Carbar as an example, you can obtain a vehicle
from as little as $169 a week, which will get you some-
thing like a base-spec 2013 Holden Cruze hatchback.
Of course, that price goes up as you opt for something
bigger, better and newer.
For example, want a new 2018 model year Mazda CX-5
with leather seats valued at $33,990? That would cost