Financing options such as PCP, HP and leasing have been around for years, but the concept of a car subscription is relatively new. We take a look at the ins and outs of car subscriptions,  and whether they’re a useful option for those looking for a new car.  

What is a Car Subscription? 

A car subscription is when you pay a monthly fee in exchange for ‘owning’ a car. Car subscriptions simplify motoring by removing the individual expenses such as purchasing, taxing, insuring and maintaining a car. These are replaced by a monthly fee agreed upon starting the subscription. 

For another way of looking at it, consider them the motoring equivalent to a content streaming service such as Netflix, where monthly payments give you access to content without further steps needed. 

Whereas buying, taxing, insuring and maintaining your own car is akin to buying a BluRay player and individual movies, it may cost more initially and take more steps, but you will own the device and have the use of it indefinitely. 

Subscription term lengths generally range from one month to 3 years, but with the critical factor that most suppliers allow extra time to be added at will, meaning you don't have to be tied in to a long-term contract from the outset. 

How do Car Subscriptions Work? 

Buyers can select from a wide range of suppliers, with many independent companies and vehicle manufacturers offering subscriptions in the UK. Once a suitable supplier and car is selected, the term length and mileage limits are agreed upon.  

Monthly car subscription costs range from £300+/month with mileage and car type affecting the price, but contract length being the biggest factor.  

For example 2 2-year agreements can be as little as £299 per month, but if you only wanted to ‘subscribe’ for 1 month then it rises to £699 (Based on a Seat Ibiza covering 800 miles per month). 

Road tax (VED), insurance, roadside assistance and MOT testing is usually all covered too, but make sure to check the terms of your agreement beforehand. Any servicing that falls due during your contract will be covered, as will replacement tyres. 

The Process of Starting a Car Subscription 

As with signing up to any contract, the vehicle provider will need proof of ID, driving licence and will run a credit check. Once the formalities have been addressed you will need to select the car and mileage limits you require. 

Once these terms are agreed and the contract’s signed, you pay a monthly flat rate (assuming you stay inside the mileage cap), and get the exclusive use of a brand-new car.  

Car Subscription vs Leasing 

Car subscriptions are just one of the ways to get hold of a brand new car to drive, and is just one of the options that comes with monthly payments. Whereas PCP and HP hold the possibility of buying the car, leasing is the most comparable with car subscription services.  

Leasing differs in the level of service provided, generally when leasing a car, insurance, maintenance and servicing falls to the lessee (the person who takes out the lease). In some cases road tax is accounted for in the lease payment, but not always. 

This partly explains why lease deals are generally cheaper than car subscriptions, but a big part of that is the contract term. Lease terms start at 24 months and can extend to 48 or more. Car subscriptions offer the option of short-term usage, from one month upwards.  

As the lease provider is guaranteeing 24 - 48 months of payments, they can afford to offer more reasonable terms, whereas a subscription provider will incur more costs from one-month subscription periods. 

The bottom line is that if you want a car for a fixed long-term arrangement, leasing is probably better, but if you’re not sure when you’ll need to hand the car back, go for a car subscription. 

Car Subscription vs Renting 

If you use a car subscription for one year or more, then leasing would be the most comparable product, but for periods under that time, the traditional method would be a rental service. So how do they compare? 

For terms of two to three months, car subscriptions can actually work out cheaper than high street rental stores. One caveat is that rental companies don’t usually have mileage limits on their cars.  

The cost will differ depending on the type of car, length of term and your location, so we’d suggest getting some estimates from local companies before deciding. 

What Happens if You Damage a Car on Subscription 

Much like car finance such as HP or PCP, car subscription services have strict guidelines on what is and is not covered, most providers will deduct from your security deposit for minor scratches, with larger dents and damage being charged at higher rates.  

Best Car Subscription Services in The UK 

There are many independent subscription providers in the UK, as well as multiple manufacturers that provide cars directly through their dealer networks. Each has its own benefits and disadvantages depending on your choice of car and other options, so we’ve listed some below to look into. 

Manufacturer Providers of Car Subscriptions 

Jaguar Land Rover: Pivotal 

Ideal for drivers doing lots of miles per year, Pivotal offers 12-month unlimited mileage subscription services. Compared to a lease or PCP deal this could really save some money if you do more than 15,000 miles per year. 

Volvo: Care By Volvo 

Allowing you to select from any car in the Volvo range, Care by Volvo allows a 30-day trial with no obligation, then three-month rolling contracts. Perfect for those needing a car for an uncertain amount of time. 

Hyundai: Mocean 

Whilst it is one of the most reasonably priced options, with the i10 being available for less than £250, Hyundai Mocean doesn’t offer the entire range of models, which may be an issue for some.  

Car Subscription Providers 

My Car Direct 

The benefit of not taking out a car subscription with a manufacturer is you have a wide range of makes and models to choose from. My Car Direct adds to that, with both EVs and ICE vehicles, cars and vans all available with free nationwide delivery.  

Elmo  

Elmo is an EV specialist, meaning you won't be able to subscribe to petrol and diesel cars through their service. This does mean however they are experts on EV makes and models and can advise on charging types and requirements.  

Drive Fuze 

Offering both EV and petrol/diesel cars, Drive Fuze doesn’t limit you on fuel type, they also offer a generous 1,000-mile-per-month cap, and insurance included across most of the cars. A rolling one-month contract is also perfect for those that can’t commit to a fixed-term deal. 

Advantages of Car Subscriptions 

Whilst more expensive than leasing, car subscriptions  do hold some overall benefits: 

• Short-term (monthly in most cases) contracts mean you can change cars every few months with little extra cost 
• Extras such as tax, servicing and maintenance are not your problem 
• Less commitment that other financing means life circumstances such as a change in job can be negotiated  
• No car to have to sell before being able to get a new one 

Disadvantages of Car Subscriptions 

• Higher monthly price than leases 
• No equity in the car by the end of the term unlike HP 
• Any damage - even from other people - will cost you money when handing it back 

Factors to Consider With Car Subscriptions 

Thankfully because most car subscriptions offer a rolling contract basis, you can sign up for a shorter period first to get a feel for the car you’ve selected, but even so there are a few things. 

• Are you going to need a car consistently for the next two years or so? If so you’re probably better of buying or financing 
• Are you intending to do lots of miles per year? The Jaguar Land Rover subscription service might be for you, or consider buying a cheaper car outright to avoid any excess mileage fees 
• Can you afford the higher monthly payments? 
•  Under 25? Many companies won’t offer car subscriptions to anyone under 25. 

Are Car Subscriptions Worth it? 

Although more expensive than leasing in the short term, and with stricter limitations than owning outright, car subscriptions serve a useful purpose in short-term motoring. In some ways, they can be viewed as a long-term rental, as they offer no strings attached car usage. 

Generally speaking, car subscriptions are ideal for those looking for a car on the luxury end of the market, for a period of 1 to 12 months, and even better for people who are not familiar with or don’t have the time to sort maintenance, servicing, vehicle tax and all the other aspects of motoring. 

To ascertain whether they are worth it for you, consider all of the advantages, disadvantages and points to consider above. Also, check out our blogs on other types of car financing, or if you think you may need a car for a longer period of time, our guide to buying a used car. 

Car Subscriptions - Overview 

Car subscriptions are a somewhat novel but handy way to drive a new, reliable and safe car. Whilst they are more expensive than other options over the short term, they do even out when considering the costs included.  

Further to that, the convenience of being able to change or hand back the car month by month is invaluable for some. 

If you’re looking for greater flexibility with vehicle maintenance, why not try Bumper? With Bumper you can split the cost of vehicle maintenance into interest-free monthly payments. 

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