Car subscription vs purchase

Apart from buying a house, buying a car is likely the biggest financial decision most people will make. And with so many options available it can be difficult to choose the right approach.

In this guide, we’ll discuss the differences between outright purchase and car subscription.

What is a car subscription?

Car subscription is exactly what it sounds like; the freedom to get a new car, without the long-term commitment or huge upfront costs of other options. Like Netflix, car subscriptions work on monthly rolling contracts, giving you the freedom to change when your circumstances do.

While it sounds like other traditional car purchasing options like PCP, PCH and HP, there are key differences. Unlike the other options, with a car subscription, the upfront costs are low (typically one month’s payment in advance) and everything is included, from servicing, maintenance, and repairs (even tyres), to tax, insurance, and breakdown cover.

You pay a single monthly payment, and you only need to add fuel; giving you the freedom to live your life without worrying about surprise bills. With 65% of people don’t know how much they’re paying to run their car and 19% of people have taken on debt to pay for servicing costs, this clarity and security is invaluable.

Other benefits of car subscription

While a simple single monthly cost is a huge benefit in itself, it is not the only benefit of a car subscription. Other benefits are detailed below.

Flexibility

Planned or not, lifestyles, jobs and circumstances can change. New arrivals, growing kids, new jobs, unexpected job losses, and new pets can all change what you need from your car. You may need a bigger car, a different style, or just fancy a change, and car subscription gives you that freedom to change and the freedom to concentrate on living your life without your car choice getting in the way.

Lead times, selection & delivery

Since Covid, and to a certain extent before it, there has been an ongoing issue within the automotive market of long lead times on new cars, with wait times of up to six months or more.

Car subscription offers two unique benefits which help negate the impact of this. Firstly, due to the purchasing power of companies like Drive Fuze, they carry a large stock of cars available for immediate delivery, meaning delivery of your new car could be under seven days.

Additionally, as you have the freedom to change your car regularly or end the agreement, you don’t need to wait for your car with no other car available. You can take an alternative car should you need to and change it at a later date, without having to worry about buying/selling or the value of the temporary car dropping.

Cost of buying/owning a car vs car subscription

Purchasing a car outright isn’t cheap, and it ties up a lot of your precious capital in a vehicle that will depreciate in value as soon as you drive it off the forecourt. According to the AA, the average car will depreciate by up to 60% in its first three years. Even second-hand cars will depreciate over time, albeit to a lesser extent.

If you instead finance a car by opting for a hire purchase (HP) agreement, where you own the car at the end of the agreement, the finance company will require a deposit relative to the retail cost of the vehicle. This can run into thousands, especially if you want to keep the monthly payments low. Depending on how long your finance agreement is, your car may have depreciated in value so much that you still have more to pay back than it’s worth. This is called negative equity. Which could equally be an issue if you took out another kind of loan to purchase the car, not to mention the interest you pay on financing.

Even ignoring the initial cost of purchasing a car, you also need to consider the total cost of ownership, something a massive 65% of people don’t understand. With your own car, you will be liable for a number of things included in a car subscription; such as servicing, insurance, breakdown cover and repairs/replacements not covered under warranty. For example, four new tyres could cost between £200 and £2,800 depending on the quality. It’s a sad fact 19% of people have taken on debt to pay for servicing costs.

With a car subscription, you can benefit from a low upfront cost, usually one-months payment which is refunded at the end, and choose a vehicle that can be changed during the subscription period, without having to worry about the value or associated costs of car ownership, as all of that is included. This gives you the freedom to live life and focus on what matters to you, without having to worry about your car.

Car subscription or purchase - which is right for you?

Now you know the key features of a car subscription and how they compare to purchasing, you can decide which is right for you.

If you need:

• to stick to a budget
• a low upfront deposit
• servicing, maintenance, and repairs included with your car
• flexible mileage allowances
• tax and insurance costs included with your car
• no long contracts tying you in
• to be able to change your vehicle when you wish
• breakdown cover included with your car

- then a car subscription is likely right for you.

If you want:

• to modify your car mechanically or electronically
• smoke in your car
• do a track day in your car
• respray or wrap your car
• want ownership of the car

- then purchasing a car is likely right for you.

Start your own flexible car subscription today

Here at Drive Fuze, we understand that modern life is always evolving so we provide freedom to change, live your life, move forward and focus on what matters. No complicated contracts, no long-term commitments - just cars in a range of prices to suit whatever you need right now, with the ability to change when you need to.

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Check out our range and let us get you on the road quicker. 

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