Filling in the gap between outright purchase and short-term car rental, car subscription has proven to be a popular means of car ownership for modern consumers prioritising affordability and flexibility. Current market conditions including the rising cost of living, soaring petrol prices and new vehicle delays have accelerated the demand for car subscription services.
To illustrate this demand for car subscription services, Loopit has seen a 320 per cent spike in new car subscriptions across its network over the past six months compared to the preceding period. As supply shortages improve in the near future and car subscription services become more ubiquitous; more individuals will soon realise that subscribing to a car full time works out to be cheaper and more flexible than traditional means of car ownership.
Car subscriptions are an affordable way of getting on the road when compared to traditional car purchasing or financing. Customers who subscribe to drive can save on the significant upfront cost of a car purchase and avoid interest fee repayments. Individuals who are considering either a car lease or loan may face tightening lending criteria and finding a competitive interest rate is rather time consuming. Car subscription provides quick and easy access to a car – all without the extra costs.
In a research commissioned by Loopit, it was found that 85 per cent of motorists underestimate their yearly car ownership expenses by more than $5,000. More often than not, these expenses include the ongoing costs of registration, insurance and maintenance that compound over time and accrue to far more than most drivers realise. With car subscription, individuals can enjoy the benefits of having car insurance and registration, maintenance and servicing all included in an affordable weekly payment. When it comes to managing registration and insurance on an owned vehicle, many individuals are faced with the yearly budget stress as well as the vehicle inspections and inspection certificates. However, car subscription providers organise all of this so customers can get quick and convenient access to their car of choice.
When all these savings are added up, car subscription becomes an attractive option for the modern consumer, particularly the financially savvy individuals who may be looking to tighten the household budget, or understand the consequences of the high debt ratio and long-term commitment that vehicle financing attracts.
While some argue that outright purchase may provide individuals with peace of mind that they have their own vehicle, ongoing maintenance and servicing is crucial to maximise vehicle longevity. This can prove to be challenging for most individuals who may either lack knowledge about vehicle maintenance to self service or find it difficult to source a trustworthy mechanic. With car subscription, servicing and maintenance are included, meaning individuals are able to conveniently bring their car in when service is due, and collect it when it's done - all without any extra payments or surprise invoices. In addition to this, car subscription providers, including dealerships have established networks with certified mechanics and workshops - allowing individuals to not worry about having to conduct their own maintenance and servicing.
When it comes to flexibility, car subscription services offer this in three main ways:
Whether individuals are looking to travel overseas or are changing their commuting methods, car subscription provides a level of flexibility that enables them to return their car and pause their payments for whenever they are not using their car. This has been a notable trend amongst modern motorists, where data commissioned by Loopit found that 24% of individuals are driving less overall due to new work-from-home arrangements. Rather than having an idle car sitting in a driveway being left unused, individuals can simply return their car and avoid any potential depreciation or finance costs. Additionally, unlike traditional leasing and rental programs, individuals can also avoid any unexpected residual, balloon payments or cancellation fees. Flexibility is extended even further with car subscription providers having minimum terms as short as 30 days, which means drivers have the freedom to accommodate their short-term needs.
Flexibility can also come in the form of being able to swap vehicles whenever needed. For someone who may be looking to change their current sedan over to a family SUV or wanting a more fuel efficient car; car subscription allows just this with little to no fees. Car subscription plans are priced in accordance to the customer’s desired usage levels meaning they have the freedom to choose the plan that best fits their driving behaviour; and only pay for what they use. To help meet changing needs, car subscription services also allow drivers to either upgrade or downgrade their plan whenever they need to.
As driving behaviour continues to evolve due to changes in the costs and utility value of vehicle ownership, affordability and flexibility will become a more important priority. By providing flexible arrangements and inclusive offerings, car subscription looms as a long-term viable option for modern motorists to get on the road in a way that suits their lifestyle.
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