Car subscriptions versus buying a car: which makes the most sense?

There are many benefits of subscribing to a car that are unmatched by the outright purchase of a car. However, these benefits are only suitable if they align with your lifestyle and needs. In this comparison guide, we list out the factors that should be considered when deciding between car subscription and car purchase.

George Skentzos

Head of Customer Experience

Published on 

January 25, 2022


Last updated on 

January 25, 2022

Key Takeaways

In this guide, we'll take a look at ownership versus subscription and consider what each option has to offer. Our comparison will address the lifestyle factors influencing the decision to either subscribing or purchasing a car outright.

Buying or subscribing from a car dealership: which makes most sense for you?

Since everybody has different needs and desires, it is important to take into account your personal preference and how any changes to your circumstances could affect your car ownership preferences and requirements. Below, we list some of the main factors you should think about when deciding which ownership model is the right choice for you.

  • Location — Someone who moves around a lot, either for work or pleasure, may find purchasing a car outright restraining. If your work requires you travel to different parts of the country on a regular basis, a car subscription service could make a great deal of sense for you. Rather than having to drive your purchased car thousands of miles to each new location, subscribing to a car allows you to  turn in your vehicle and pick up a new one as you change your working location.
  • Budget – When it comes to the cost of owning a car, a recent Transport Affordability Index shows that the average cost of car ownership is approaching $17,000 per year, yet the vast majority of motorists underestimate this figure by a significant margin. Loopit’s research found that a massive 85 per cent of motorists underestimate their yearly car ownership expenses by more than $5,000.

    With all-inclusive car subscriptions; registration, insurance, maintenance and servicing are all covered by a regular fixed payment. All you have to pay for is fuel and tolls. As such, car subscriptions present an opportunity for you to drive cars that might have otherwise been out of your budget at a regular car dealership. Thanks to the flexibility of car subscription, you're also able to upgrade and downgrade vehicles and plans accordingly should you need to readjust to your changing financial circumstances.
  • Personal preferences — The type of cars you like to drive and what you like to do with them will play a big part in deciding whether a car subscription or conventional car ownership is the most sensible choice for you. If, for example, you are someone who likes to customise their cars, a subscription service is not going to be the right choice.

    However, if what you really enjoy is driving new cars as often as possible, a car subscription service could be the perfect solution to your car ownership needs. You can change cars as often as you desire, with absolutely no financial penalty. You won’t have to worry about taking a big loss every time you change vehicles: you can simply hand the keys back and pick a new car to try whenever you fancy.
  • Driving habits — If you take many long-distance trips in your car, you may find a car subscription service more convenient and cost-effective than buying a car outright. Most subscriptions are all-inclusive, which means you don't have to worry about high maintenance costs or more frequent service bills. However, you will need to calculate your anticipated costs carefully before you can decide whether a subscription service really will save you money. A dealership that offers car subscriptions and regular car sales should help you calculate which option will be the best choice for you. They should also be able to highlight the best car deals based on the needs of your driving frequency.
  • Initial cost — If you do not have enough money for a down payment on a new car or have other financial commitments, a car subscription service could meet your needs without putting a strain on your finances. You can simply subscribe to a service with a local car dealership, pick up the car you desire and start driving it straight away. The only financial commitment required will be the monthly subscription payments, which means there is no lump sum to worry about at the start. As the cost of living continue to rise, car subscription may be beneficial when it comes to committing to your other financial priorities such as the purchase of a first home.
  • Long-term requirements — If you only need a vehicle for a few months or you are going to need a larger car in the near future because of a growing family, a car subscription service could be the most convenient option for you. Buying new cars and selling them a few months later is one of the most expensive ownership models and involves a fair amount of paperwork too. With a car subscription, you can change vehicles as and when needed or simply cancel your subscription if you no longer need a car.

If you are a car dealership that is launching a car subscription service, it is important to set up the right infrastructure that will enable for profitable operations. Central to this is a software platform that can perform the tasks required in running a subscription service. Our Loopit platform is purpose-built, so you can save time from having to and instead focus on nurturing your customer relationships. Want to scale your subscription services? Book a demo today at!

About the author
George is the Head of Marketing and Customer Experience at Loopit. Having originally started his career as a motoring journalist and founding team member for one of Australia's top automotive startups, George has a strong passion for automotive, business and growth marketing.
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