- Is car subscription better than buying?
- Is car subscription cheaper than buying?
- Are car subscriptions worth it?
Are car subscriptions worth it?
With the slowly increasing trend of car subscriptions, it’s the question more and more drivers are starting to ask.
If you’re looking to compare getting a car subscription to buying the car and want to know are car subscriptions worth it – then keep on reading for everything you need to know.
Is a car subscription better than buying?
So, is a car subscription better than buying?
It depends.
If your needs call for flexibility, convenience, lower upfront costs and no depreciation concerns – then yes, a car subscription could be better than buying for you and your needs.
It should be noted that there are some potential drawbacks to be aware of such as:
- Mileage restrictions
- Potential cancellation fees
- Possibility of paying more in the long run compared to buying, leasing or financing
It’s important to remember that these vary between car subscription service providers.
If, however, you prefer to have total control and ownership of a vehicle, a car subscription would not be worth it for you.
Before signing up for a car subscription consider the following:
- How long you’ll need the car
- Your budget
- The specific terms and conditions of different service providers
Once you have an understanding of these factors, it should point you in the right direction of whether to get a car on a subscription or to consider other financing options such as buying or leasing.
Let’s touch on some of the ways you’ll benefit from using a car subscription:
- Flexibility: Compared to buying a car, subscriptions offer much more flexibility. You can pick how long you subscribe to a car for, and you can change between different brands or models. This is perfect for those needing a short-term ‘rental’ or wanting to try out different models before they buy.
- Convenience: Most subscriptions have the option to include insurance, maintenance, servicing, roadside assistance, and other optional extras as an all-inclusive package into your monthly cost. This makes your life a lot easier, and you can drive without having to worry about any surprise expenses coming your way.
- Lower upfront costs: Typically, with a car subscription, you pay a monthly fee that covers things like insurance, maintenance, and general repairs. When comparing this to buying a car, a subscription is a lot more affordable. Car buyers must pay a large upfront payment, whilst dealing with other ongoing costs they must sort out themselves including insurance, repairs, and maintenance.
- No depreciation: Car buyers bear the risk of their car losing value over time. As you are only subscribing to a vehicle, you don’t need to worry about how the car depreciates as this does not affect you!
How about some of the things you might need to consider before subscribing to a car?
- Higher long-term costs: Although car subscriptions can be more convenient and there are no or very low upfront costs, they can work out more expensive in the long term than buying a car.
- Limited ownership: As you do not own the car you cannot make any modifications to it, and this will not build any personal equity. On top of this, there are usually mileage limitations, which can be an issue if you use the car often.
- Poor credit: Although most providers don’t perform a hard search on your credit history, they may do a soft search. If your credit is poor, you could be rejected. However, car subscription service providers will be much less stringent than if you applied for other finance options such as a Personal Contract Purchase or Hire Purchase.
If the benefits of having endless flexibility, lower upfront costs and no worries for depreciation of the vehicle you’re driving sound like something that’s up your street, then a car subscription would be worth it for you.
If, however, the downsides don’t outweigh the benefits, including high long-term costs, limited ownership and uncertainty of future prices, then it may be worth considering other car financing options.
Is car subscription cheaper than buying?
Yes and no. The real answer is that it really does depend on how you do it.
The rule of thumb is a short-term car subscription will work out much cheaper than buying a car.
How about we give an example?
Let’s say I buy a brand-new Ford Fiesta for £25,000. In 5 months’, the value of the Fiesta has depreciated, and the Fiesta is now worth £18,000. So that’s £7,000 I’m losing within 5 months.
If I were to get this on a subscription, I could pay around £500 a month for the Fiesta. Fast forward 5 months, I will have paid just £2,500 to drive the Fiesta.
However, if you subscribe to a particular car for over 4 years, then this is likely to work out as more expensive than if you bought the vehicle – but this does depend on the model.
Here are several factors that affect whether a subscription is cheaper than buying:
- Length of the subscription
- The type of car
- Mileage allowance
- If you have an all-inclusive subscription
- The specific terms and conditions of the service provider
For some people, if car subscriptions work out more expensive than buying, then it is usually because the benefits including flexibility, maintenance included and no re-sale concerns, outweigh the expense of the car subscription.
Things such as ease, flexibility and it being a hassle-free alternative to vehicle ownership. On top of this you enjoy the benefits and freedom of having a car without the upfront costs of buying one.
The all-inclusive car subscription covers most of the costs including maintenance, insurance, servicing, breakdown cover and more. While this can work out more expensive overall, if you subscribe to a particular car for a long period, the ease of having everything all in one monthly cost is an attractive benefit to many.
So, to summarise and answer the question: Is car subscription cheaper than buying? If you are looking to get a car for a short period of time, this could be between 3 months to a full year, then a car subscription is likely to be the more cost-effective option for you over buying a car.
If you know you will need a car for longer than two years or more, we suggest looking into other finance options such as leasing or purchasing your car.
Are car subscriptions worth it?
So, are car subscriptions worth it?
If when searching for a car your priorities are ease and flexibility, convenience, lower upfront costs and you don’t want the worries of depreciation – then a car subscription is likely your perfect solution.
Just remember the drawbacks involved with a subscription including mileage limitation, possible cancellation fees (dependent on the provider) and the possibility of paying more in the long run than you would have if you had purchased the car outright.
If the benefits outweigh the cons, then a car subscription is worth it!
We would recommend first establishing your needs, requirements and what you need from a car subscription, then compare different providers and consider which is the most suitable one for you.
