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What are car subscriptions and how do they work?

A bit different to leasing, here’s TG’s guide to the increasingly emergent car subscription model

Published: 14 Mar 2023

Alongside the latest streaming platform subs, customised skin care products, discounted dog treats or the UK's greatest car magazine, car subscriptions are the latest thing to want to debit regular cash from our accounts. Among the myriad ways to get yourself on the road, subscribing on a monthly basis to your latest motor sounds a lot like leasing a car, but there is a difference.

Where leases tie you into a lengthy contract, car subscriptions give you more flexibility. When we say car subscriptions, we’re talking in a car 'ownership' capacity, rather than the subs you sign up to secondarily, to enable features in the cabin. Car subscription is a car-usage model similar to renting, but not quite the same.

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Car rentals tend to have a maximum length imposed, and can limit mileage with penalties. This is down to the way they’re sold on after they’ve spent time on the fleet. Rentals are also less specific. When you subscribe to the car, you get the car you want, not the model available that’s closest to the one you paid for.

Is it cheaper to subscribe to a car?

Depends, innit. If you’re not intending on owning the car, or need to get a flavour for the car on a longer basis than the seventeen-minute test drive from the dealership, subscribing to a car can be cheaper than buying one.

For example, if you’ve been considering a daring switch to all-electric power, you might want to dip your toe and find out for yourself just how wretched the public charging network can be. Since frustrations can differ regionally, don’t take our word for it.

On a car subscription, you can change the car - after a defined period - so you might want to switch to an SUV for a smaller hatchback. As mentioned, you can keep subscribing for as long as you need, unlike a rental.

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With Personal Contract Purchase (PCP), you need an upfront deposit. With outright purchase, you need a chunk of money very few of us have and financing a car usually requires harder credit checks than might be required with a subscription.

What’s included in a car subscription?

The monthly cost of a car subscription is fixed. It includes the use of the car, plus a few extras, unlike leasing, where additional charges feel like they’re tacked on arbitrarily.

The extras in a car subscription include road tax and breakdown cover, plus most subscription companies will deliver the car to you - at home or the office - as part of the service. Maintenance is also part and parcel of the deal, and some companies even include the tyres in the package. This makes car ‘ownership’ more financially clear. But of course, you never actually own the car. You’re just paying for the use of it for a time.

Figuring out if its right for you is an exercise in number-crunching. Finally putting all that adding and subtracting from pre-GCSE tests to good use, you have to be realistic. A new Volvo XC90 on car sub is £859 per month. If after three months you change your mind, could you admit that was the best use of near three grand?

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TG's Paul Horrell makes a strong case for buying a used car, over financing a new one.


What car companies are doing subscriptions?

All the premium car makers are having a go with fancy titles, such as Care By Volvo, or through subscription-only companies, like Wagonex and Onto.

How much is a car subscription in the UK?

They give you flexibility, they include a load of extra stuff, they’re not going to be cheap. However, take our earlier example of switching to electric. If you spend £2,500 over three or four months to find out if an electric car is going to suit your needs or not, that’s got to be better than shelling out over £30,000 and/or tying yourself into a lengthy contract, only to accept months later than your car pick doesn’t really work for you.

Is it better to subscribe a car?

Ask us one on the meaning of hieroglyphics during the reign of Cleopatra. Seriously, you know your lifestyle, your budget and your immediate and long-term vehicular needs. Car subscription is an option worth exploring, but you’ll need to get the calculator out.

Can you get a car subscription without a credit check?

As with leasing or financing, taking out a car subscription will require a check to see if you can afford to make the monthly payment. However, most car subscription companies run a soft check, which doesn’t go against your score. Thus, being credit checked for a car subscription shouldn’t hurt your credit score.

What’s the catch with car subscriptions?

It’s not ownership. As with rental and leasing, you have to look after the car well, return it in good condition. When you own a car, dinks are yours to tolerate or repair. When you subscribe to use a vehicle on a short-, medium- or long-term basis, you need to keep the thing as pristine as possible.

It’s not for everyone. And in the longer term, it can work out quite expensive.

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