Auto subscription services on the rise as drivers avoid the cost of owning a vehicle

It’s been described as Netflix for cars – choose your model, pay weekly or monthly fees, and cancel anytime.

Car subscription services are on the rise as more and more drivers avoid the expense of owning their own car.

Unlike companies like GoGet where you rent a car for a short time and the car is subject to change each time, a car subscription means you don’t have to share the car; you keep the same for as long as you want.

While car subscriptions have been around overseas for a decade, they are relatively new to Australia. But they’re growing, especially with more and more people working from home and reassessing their need for an expensive vehicle that depreciates the second it leaves the showroom.

“Auto subscription services are more popular than ever in Australia,” said Joshua Dowling, national automotive editor of Drive, part of the Nine Group.

“(They) are growing up because not everyone wants or can afford a new car.”

Competition in the sector is intensifying as new players enter the market.

You’ll pay an upfront fee depending on the model you choose and there’s a minimum four-week subscription.

There is a charge for credit card payments, late fees are $ 27.50 and if you drive more than 26,000 km per year on a pro rata basis, an additional charge of 14 cents / km applies. Two weeks notice is required to cancel a subscription or change car.

They have three price structures. The cheapest comes with a 30-day switch, 1000km per 30 days included with a deductible rate of 30c / km.

A “big” car starting at $ 147 per week comes with two changes allowed in 30 days, including 2,800 km and a 10c / km deductible rate. The minimum subscription is 30 days and 30 days written notice is required to cancel.

“If you’re locked into long-term funding it can be tough to get out of it and it can cost you a lot of money as well,” Carly chief executive Chris Noone told 9News.

“The subscription gives you the flexibility of having the car you want that suits the needs of the moment.”

The minimum term is 30 days and some plans include an upfront membership fee. Each plan has a weekly mileage limit and the exceedance rate is 33c / km. Late fees apply and a bond is payable, ranging from $ 500 to $ 2,500.

“You don’t have to worry about all the payments associated with owning a traditional car like registration, insurance, depreciation, maintenance costs. For a low weekly payment, that’s all inclusive, ”Hellocars Managing Director Paul Higgins said.

Other competitors include Simplr, Subcribacar, and Motopool. The car rental company Avis has launched its subscription service called Avis Flex, offering long-term deals that are cheaper than their usual rental rates.

The trick is to check the fine print – some have limits on how much you can drive, some don’t allow other drivers to get behind the wheel, and some have high one-time membership fees.

“You really have to do your math. It might not matter to a lot of people, but for some people who don’t drive a lot, it does make sense,” Mr. Dowling said.

The growing popularity of these services has a downside, Mr. Dowling said. As they become more popular, it becomes harder to get the cheaper models that appeal to most people in the first place.

It costs on average between $ 2,000 and $ 3,000 to keep a small sedan on the road. If the numbers don’t add up, you might be better off with an Uber account or using taxis.