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Car Subscriptions vs Buying a Car: How to compare your options when choosing a car

By carbar on the May 12, 2023

9 minutes

Are you considering whether to buy a car or subscribe to one? Both options have their benefits and drawbacks, so you need to weigh them carefully...

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Are you considering whether to buy a car or subscribe to one?

Both options have their benefits and drawbacks, so you need to weigh them carefully before making a decision.

But when it comes to making that decision, there are also other options to consider such as car leasing and car sharing.

Whether you're a first-time car buyer or a seasoned driver, our guide will help you determine the best option for your unique needs.

So, sit back, relax, and get ready to compare your options when it comes to choosing a car.

Car Subscriptions

Car subscription services offer an alternative way to drive a car without the commitment of buying or leasing.

For a weekly fee, you can choose from a wide range of vehicles, including popular, luxury, or electric models, without worrying about the hassles of traditional car ownership, such as insurance, registration, or depreciation.

The subscription period is flexible, meaning you can stop or swap cars with as little as two weeks' notice. Plus, with convenient online management tools, you can monitor your expenses and make changes to your subscription whenever you need to.

Car subscription services are ideal for people who value convenience, flexibility, and freedom when it comes to their transportation needs.

The Pros of Car Subscription

No lump sum payment (e.g buy outright): With car subscriptions, you don't need to make a large upfront payment to buy a car outright, which can be a significant financial burden. Instead, you pay a weekly fee, making it easier to budget and manage your expenses.
No commitment or fixed-term contracts (e.g. car financing): Unlike traditional car financing, there are no long-term contracts or commitments with car subscriptions. You can subscribe to a car for as long or as little as you like, rather than signing a contract for 5-7 years worth of repayments plus interest.
One simple weekly payment so you can budget easily: Car subscriptions offer a simple and predictable payment structure, with one weekly fee covering all the costs associated with car ownership, including maintenance, insurance, and registration. You will always know how much you need to pay, week after week, meaning there are no surprises when it comes to managing your money.
No worries about selling or trading in your car: You don't have to worry about selling or trading in your car when you're ready to upgrade or change vehicles. Simply return the car and choose a new one.
Removes risks of buying a lemon: One of the most significant risks of buying a car is ending up with a lemon - a car that has hidden defects or problems. With a car subscription, you can avoid this risk, as the service provider takes responsibility for the quality and condition of the cars they offer.
Options to buy the car mean you're in control of costs: Some car subscription services offer the option to buy the car at the end of the subscription period. This gives you more control over the costs associated with owning a car, as you can choose to keep or sell the vehicle as you see fit.
Off-balance sheet, so it just makes sense for small businesses: Car subscriptions are considered an off-balance sheet expense, making them an attractive option for small businesses that want to manage their cash flow more effectively.

The Cons of Car Subscription

May cost more than other options: While car subscriptions offer a convenient and flexible way to drive a car, they may be more expensive than other options in the long run, such as buying a used car outright or leasing a car.
It may have mileage restrictions: Car subscriptions often come with mileage restrictions, which can limit the distance you can drive the car without incurring additional fees. This may not be ideal for those who need to drive long distances regularly.
May have a higher excess than what you may choose yourself: Car subscription services typically include insurance coverage, but the excess (the amount you pay in the event of an accident) may be higher than what you would choose if you were to arrange your own insurance. This means you may need to pay more out of pocket in the event of an accident.
You're not accruing any equity in the car: With a car subscription, you don't own the car and aren't accruing any equity in it, unlike when you buy a car outright or finance it. This means you won't have the option to sell the car to recoup some of your investment or trade it in for a new one.

Browse cars available for subscription
Brows electric cars available for subscription

Buying a Car

Buying a car is one of the biggest purchasing decisions you'll make in your life.Deciding whether to buy a new vs used car can be a tough decision, but regardless of which you decide, there are pros and cons when it comes to buying.

The Pros of Buying a Car

The cheapest option if buying outright: Buying a car outright is often the cheapest option in the long run, as you don't have to pay interest or finance charges. This can save you money over the life of the car.
Own the car if buying outright: When you buy a car outright, you own the vehicle outright, giving you the freedom to use and modify the car as you see fit. You also have the option to sell the car if you want to recoup some of your investment.
Pay down all or some of the costs of the car if financing: If you can't afford to buy a car outright, financing the car can be a good option. You can pay down some or all of the costs of the car over time, which can make it more affordable.
Choose your insurer, premiums and excess: When you own a car, you have the freedom to choose your own insurance company, select the level of coverage you need, and set your excess amount. This can help you save money on insurance costs and give you more control over your coverage.
Manage maintenance and servicing costs: You're responsible for managing maintenance and servicing costs. However, this can also be a positive as you have the freedom to choose where to take your car for service, how often to service it, and which parts to use. You can also choose to do some of the work yourself, which can save you money over time.

The Cons of Buying a Car

A large outlay of cash or commitment to the car via finance: Buying a car outright can be a large financial commitment, requiring a significant outlay of cash, so you will need to part with a substantial chunk of your savings. Or if you finance the car, you'll still need to make monthly payments and may be required to pay interest or finance charges.
Need to manage all associated costs - depreciation, interest, insurance, maintenance, servicing: When you own a car, you're responsible for managing all associated costs, including depreciation, interest (if financing), insurance, maintenance, and servicing. This can be time-consuming and add up to significant costs over the life of the car.
If buying a pre-owned car, run the risk of buying a lemon: When buying a pre-owned car, there is always a risk of buying a lemon - a car that has hidden problems or requires significant repairs. This can be a significant risk, particularly if you're buying the car from a private seller.
Need to trade in (at a wholesale price) or sell it yourself (at a reduced retail price): When you're ready to get a new car, you'll need to either trade in your old car (often at a wholesale price) or sell it yourself (often at a reduced retail price). This can be time-consuming and may not provide you with the best return on your investment.

Browse used cars for sale
Browse used electric cars for sale

Leasing a Car

Car leasing is a process by which individuals can rent a car for a fixed period, typically for 2 to 4 years, in exchange for a monthly fee.

The individual does not own the car but is granted exclusive use of the car for the duration of the lease.

Car leasing is a popular option for those who don't want to commit to the cost of owning a car outright or taking out a car loan.

However, there are limitations to leasing, such as mileage restrictions, and users must maintain the condition of the car to avoid additional charges at the end of the lease.

At the end of the lease, users can choose to return the car or purchase it at an agreed-upon price.

The Pros of Leasing a Car

Lower monthly payments: Lease payments are generally lower than monthly loan payments for a purchased car, which can make it a more affordable option for those who want to drive a newer or more expensive car.
No worries about resale value: When leasing a car, the leasing company, not the driver, is responsible for the car's resale value. This means that the driver can simply return the car at the end of the lease period without worrying about the car's value in the used car market.
Access to the latest car models and features: Leasing allows drivers to drive the latest car models with the newest features, without the burden of long-term ownership.
Lower maintenance and repair costs: With a lease, the car is generally still under warranty, so drivers don't have to worry about expensive repairs and maintenance costs.

The Cons of Leasing a Car

No ownership of the car: With a lease, you don't own the car, which means you don't have any equity in the car, and you won't have anything to show for your monthly payments once the lease period is over.
Mileage restrictions: Most leases come with mileage restrictions, and drivers will incur additional costs for exceeding those limits.
Higher insurance premiums: The insurance premiums for a leased car can be higher than for a purchased car because leasing companies often require more coverage.
Penalties for wear and tear: Drivers can be penalised for excessive wear and tear on a leased car, which can result in additional costs at the end of the lease period.

Car Sharing

Car sharing is a service that allows individuals to rent a car for a short period of time, usually by the hour or day.

Unlike traditional car rental services, car-sharing services allow users to pick up and drop off the car at various locations throughout the city, making it a convenient option for those who don't want the hassle of owning a car.

The popularity of car sharing has grown in recent years as people look for more sustainable and cost-effective transportation options.

The Pros of Car Sharing

Lower cost than traditional car rental services: Car-sharing services often offer lower rates than traditional car rental services, making it a more affordable option for those who need to use a car occasionally.
Flexibility: Car-sharing services often offer a variety of car models and sizes, which means users can choose the right car for their needs on a given day.
No maintenance and repair costs: Car-sharing services cover maintenance and repair costs, so users don't have to worry about these expenses.
Eco-friendly: Car-sharing services reduce the number of cars on the road, which can help reduce air pollution and traffic congestion in urban areas.

The Cons of Car Sharing

Availability: Car-sharing services may not be available in all areas, and there may be limited availability of cars during peak times.
Limited range: Car-sharing services often have a limited mileage range, which may not be sufficient for long-distance trips.
Inconvenience: Users may have to travel to a designated location to pick up and drop off the car, which can be inconvenient.
Risk of damage or theft: Users may be responsible for any damage or theft of the car while it's in their possession, which can result in additional costs.