Auto subscriptions are billed as the next big thing, the automotive equivalent of pay phones or online TV packages, which are expected to account for nearly 10% of all new car sales in the US and Europe by now 2025.
Subscription programs go by many different names: flexible lease or rental; long term rental or long term rental. The main idea is that you have a car for as long as you want; from one month to several years. There is no fee or a small fee to sign up and you can end the contract or trade in the car whenever you want, subject to conditions.
A standard monthly mileage allowance (typically 800 or 1,000 miles) is included or you can purchase higher mileage. Subscriptions promise freedom of choice, no commitments, and no unexpected bills – in theory.
What is the difference with a lease?
Traditional leases such as the personal rental contract (PCH) are set for one to four years for a fixed monthly amount, with a down payment that can reach several months in advance. Insurance and maintenance are not included but can be added. Subscriptions often do not have a membership fee or one-time fee less than a month’s rental.
Neither car subscriptions nor rentals offer the option of owning the car. When the term is up, you return it. A subscription is also not the same as a Personal Purchase Agreement (PCP), which is a fixed-term finance contract with the option to keep the car at the end of it in exchange for a final payment.
Subscriptions generally include maintenance, warranties, road tax and often insurance. Cars are collected and returned for maintenance and repair. Some leases also offer this.
Subscription services reserve the right to trade in your car for a similar model during rental if, for example, it has reached its mileage limit and needs to be resold. Much like a lease, the entire process of creating the subscription package can be done online, supported by live chat or a call center. Most suppliers deliver the car to your door and collect it when you decide to finish or trade it in. Subscriptions are mainly managed through an app on your mobile phone.
The advantages of a car subscription
For many, the biggest benefit will be not having to make a long-term financial commitment or make a large upfront payment. You can start and stop a subscription, for example if you don’t need a car for a few months. It is difficult and expensive to end a fixed-term lease, PCH lease, or PCP finance agreement early.
Incorporating all of your driving costs into one monthly payment is appealing to many and if you’re used to having a company car and all the support that comes with it, a subscription offers much the same experience. . If you receive a company car allowance, it can be purchased.
Subscription cars are usually new or are a maximum of three years old, and if you’re a car enthusiast, there are services that allow you to cut and change to try out the latest models or have a sports car for a weekend. At the premium end of the market, you can have a car configured to your specifications.
The disadvantages of a car subscription
All plans have age stipulations which vary by car. For example, to have a Drover (mixed brands) subscription you must be at least 22 years old and have had a full UK license for at least one year. Even stricter conditions apply elsewhere – you won’t ride in a Land Rover or Jaguar under its Passport program unless you’re at least 30 years old.
There is the potential for complications in insurance. Some providers include it in the monthly cost and cover you under a fleet insurance policy. Others give you the option of an uninsured title price and a higher monthly cost is revealed once you provide your details for a quote. There may be charges for additional drivers, as not all providers assure you to take the car overseas and there may be significant excess for damage.
Most providers allow you to use your own insurance policy, but it must be complete and must be approved by them. Additionally, if your provider has a fleet policy, you are not a designated driver, so you will not create a no-claim bonus for your own future insurance.
If you live in a town or city and park your car on the street with an annual resident parking permit, it can create a bit of a hassle. The more often you trade in your car, the more paperwork you’ll have to deal with changing the registration number and proving that the car is attached to your address.
All programs differ in their details, but websites usually have comprehensive FAQs and are open to questions.
What types of subscriptions are offered?
Offers change all the time, but can be broken down into those from automakers, independents, fleets, and rental companies. Here are some UK-based examples with prices in April 2021.
The few subscriptions managed directly by car manufacturers are at the premium end of the market.
Jaguar / Land Rover – Pivotal
In 2018, Jaguar Land Rover launched Carpe (from Latin Carpe Diem enter the day) in the form of a 12 month unlimited mileage subscription for high mileage drivers who could purchase a new Land Rover or Jaguar every 12 months. It was relaunched in 2020 as Pivot, with a minimum duration of 90 days and monthly vehicle exchanges possible. There are several levels of membership and members can suspend their membership from month to month. A new vehicle arrives every six months. It’s £ 550 to join, then £ 750 to £ 1,600 per month including insurance.
Volvo – Care by Volvo
Volvo Maintenance by Volvo The subscription is rolled out across the UK in 2020. Customers can choose any model from the current Volvo lineup (built to order or from stock), assemble the monthly package on an app and test drive the car during a thirty day trial. There is no registration fee, then a rolling three month contract. Insurance is not included and rates range from £ 559 to £ 799.
Rather than administering their own subscription services, many UK car suppliers have partnered up Drover, which is owned by one of The Car Expert’s business partners, Cazoo, the online used car supplier. Subscribers can choose from brands such as Volkswagen, Mercedes, Audi, BMW, Hyundai, and Toyota. Although the full range is not displayed for every brand, Drover offers to find specific models.
Cars can be up to three years old. Hires can last anywhere from one to 24 months, and monthly costs are lower for longer terms. There is a one-time membership fee of £ 249 and 800 miles per month are included. Insurance is not included. In April 2021, prices started at £ 249 for a Fiat 500.
Cocoon vehicles describes itself as a family business based in Derbyshire and operates one to three month short term leases or subscriptions. It doesn’t sell insurance, and you can rent convertibles and performance cars. A minimum of 1,000 miles is included and the lowest monthly subscription starts at £ 514.80 for a SEAT Ibiza.
Long term rental options
Since memberships are like long rentals, some traditional rental companies also have short or long term deals and the option to upgrade from a supermini to a minivan or van when you need it. However, if you are using a specific car, these programs may not be suitable for you, as the advertised car is charged “ or similar ”. You are renting a size and type, not a specific model.
Sixt + is an all-inclusive subscription that allows you to trade once a month on a rolling contract that must be renewed every three months. The one-time setup fee is £ 249 and prices start at £ 429.
Hertz 28+ (for a minimum rental of 28 days) is similar to the Sixt offer, with a few differences. It includes an additional driver, free monthly valet parking and you can use your own insurance. Hertz 28+ prices are not displayed on the website but are subject to investigation.
Electric car subscriptions
If you’re not sure if you can afford an electric car, an electric subscription might be right for you. Many automakers and subscription providers see an auto subscription service as a gateway to electric car ownership, giving customers the option of living with an electric vehicle for a few weeks or months before taking out. a major financial commitment.
Sure claims to be the UK’s largest electric car subscription service. You choose your model – which can be nine or up to three years – according to a monthly flat rate with the possibility of one month rents. There is no setup fee, but a £ 49 delivery charge. Access to UK public charging points via BP Pulse, Shell and Tesla superchargers is included. If you charge at home, it’s on your bill.
Insurance for one person (over 25) is included. The subscription is fully managed by an app on your phone, which also acts as the car key. The Onto range begins with the Renault Zoe and extends to Audis, Jaguars and Teslas. Prices in April 2021 started at £ 389 for a Zoe.
Elmo is a rival of Onto and its subscriptions differ in that users can build up a set of options. Open to drivers over 30, all prices advertised include the monthly cost of the vehicle, comprehensive insurance, breakdown cover, road tax and a carbon offset contribution. You can choose to add a home charging station, renewable home energy and a public charging subscription.
Subscribers must commit to a minimum rental of three months, then they can be for one to six months. The brands available or to come in April 2021 were from MG, Renault, Nissan and Fiat. There was a one-time administration fee of £ 95, free delivery within 50 miles of the supplier. A Zoe cost £ 379 per month.
Is a subscription cheaper than renting or buying?
Comparing the price to a lease or a PCP is not straightforward as they are quite different products and you can shop around for your own insurance. What’s crucial is the total cost of ownership (TCO) once you add in all the costs of running the car.
Onto is blunt about this, saying that “ while monthly usage charges may initially seem uncompetitive with more traditional contract and PCP rental rates, the total cost of ownership for the customer is actually comparable when the absence of a lump sum deposit and the inclusion of insurance, pricing and maintenance are taken into account ”.
Rather than a good deal, the value of a car subscription is the price you give with no long-term financial commitment and to be able to drive and change new or recent cars whenever you want.