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How do car subscriptions work?

January 1, 2023

How do car subscriptions work?

Car subscriptions are a natural progression of the subscription model we’ve come to be familiar with through services such as Netflix and Spotify, but for cars. In essence, they’re a new way of managing your life as a driver, and they’re emerging as a fantastic means to enjoy the benefits of car ownership with none of the hassle. 

If you’re thinking of taking out a car subscription, you’ve come to the right place. In today’s post, we’ll be looking into how a car subscription works in more detail. 

Benefits of car subscription over car ownership

Instead of being stuck with one car long term, a car subscription gives you easy access to a whole range of different cars – which makes it great for when you want to try a few different vehicles to decide which one’s right for you. You get the freedom to switch cars whenever your needs change, or even to hand the vehicle back pretty much at the drop of a hat, no questions asked. Rather than being tied into a long-term commitment, you’re only ever committed to a month. 

But it’s not just the lack of commitment that makes car subscriptions so revolutionary. You’ll be free from the budgeting headaches associated with leasing a car or buying one outright, with the numerous different running costs – insurance, maintenance, road tax, to name but a few – all covered by one fixed monthly payment. All you do is add the fuel and away you go!

Not only is this a lot more convenient, but it also means you’re free from the worry of how you’ll cover unexpected expenses, such as a new windscreen or set of tyres. Given that 19% of us have taken on debt to pay for servicing costs, this peace of mind is invaluable.

The upfront costs are much lower, too, and you even get the upfront payment (one month’s subscription) back when you return the keys! Overall, taking into account running costs and upfront payments, car subscription equates to a potentially lower overall cost compared with traditional car ownership or leasing, and certainly a lower committed cost of ownership.

The difference between car leasing and car subscription

Before we go any further, let’s clarify one important fact: a car subscription isn’t the same thing as a car lease (including personal contract purchase, known as PCP). Although they have a monthly payment in common, they’re two very different things:

  • Monthly payments for a lease don’t include any of the running costs – these are extras that you pay for yourself. These include insurance, maintenance and road tax.
  • The upfront costs of a lease are higher, with a substantial lump sum due at the beginning of the lease (and the end if you decide you want to keep the car). With a car subscription, the upfront payment is just one month’s subscription fee, and you get it back at the end of the subscription.
  • A car lease typically lasts two to four years, with financial penalties if you need to get out of the contract early. A car subscription gives you a lot more freedom, as you’re only ever committed to a vehicle for a month.

Read more on the differences between car subscription and car leasing.

Step-by-step guide to subscribing to a car

Car subscriptions are easy to set up, and unlike the long waits you can sometimes have when leasing or buying a car, you could be picking up the keys in a week. Here’s a step-by-step breakdown of what’s involved in subscribing to a car.

Step 1 – choosing your car

First up, the fun bit! You’ll have plenty of different makes and models to choose from, so browse the subscription cars on offer and see what might suit your needs. There are a few different things to think about when choosing a car, such as what you plan to use it for (daily commuter or basic runaround?), how many seats and how much boot space you’ll need, and what type of fuel you’d like it to run on (including electric or hybrid). 

Also consider whether you’d prefer manual or automatic transmission, and whether there are any features you particularly want, such as a heated front windscreen or heated seats. Of course, budget comes into it as well.

The best thing about a car subscription is that it doesn’t matter if the car you choose turns out to be not quite right for your needs – you can just swap it for a different one! It’s not a permanent decision, so it can flex to suit your changing circumstances, whether that’s a new baby, new dog or change of job.

Step 2 – confirming the specifics

Your car subscription provider will need to know who will be driving the car on your subscription, such as your spouse, and what your intended use of the car will be. It’s also at this point that you’ll confirm the monthly mileage you’ll need. For our subscriptions 1,000 miles is included as standard, but you can add extra to that if you think you’ll need it.

Step 3 – checking your documents

Now for the paperwork. At this stage in the car subscription process, you’ll need to provide some documents, such as your driving licence and proof of your address, to verify your ID. A soft credit check comes next, but don’t worry, this won’t affect your credit rating. 

You’ll need to make an upfront payment once you’ve given the go ahead and ordered your subscription. This consists of a month’s subscription payment, plus any admin and car delivery fees if they apply. Once you hand the car back, you’ll get that month’s subscription fee back.

Step 4 – car delivery

Time to prepare for your new arrival! You’ll be able to choose the day you want your new car to arrive, and on the day we’ll give you a ring to confirm what time we’ll be with you. Have your driving licence to hand – we’ll need you to be there in person to take delivery of your new wheels. We’ll take the month’s subscription payment on this day, which will become your payment day each month until the end of your subscription.

Step 5 – changing or returning the car

The beauty of your car subscription is that you can give the car back, or change it for a different one, at any time. So, whether you’ve got a new baby or the kids have flown the nest, you’ve changed from commuting to working from home or you’ve got a new four-legged friend to fit into your car, you have the freedom to browse our cars and find one better suited to your new circumstances. Or you can let us know you’d like us to come and collect the car if you no longer need it – at which point you’ll get back that upfront payment, less an admin fee.

Is car subscription right for you?

Car subscriptions have so many great benefits to offer when compared with traditional car ownership or leasing options. They’re perfect for when you want to try out a few different cars before committing to buying or leasing, or for when you’re waiting for a new car and need an interim vehicle. But they’re also an excellent longer-term solution if you’re looking for a more flexible way to take advantage of having a car. In particular, they give you the freedom you need when your circumstances change. If you switch to a job that means working from home and no longer need to commute, for example, you’ll be able to hand the car back if you don’t need it.

While they’re a no-brainer for many of us, there are a few scenarios in which a car subscription may not be quite right for you. For starters, you’ll need to be over the age of 25 to sign up for a car subscription – so if you’re 17 and have just passed your test, you’ll unfortunately need to wait a few years before you can enjoy the freedoms of subscribing to a car.

If you’ve got points on your driving licence or previous disqualifications, or you have a poor credit rating, a car subscription may not be available to you. You’ll also need to think about how many cars your household needs, as you can only have one subscription car per household unless there’s only one driver allocated to each. Both people can’t be on both cars, in other words, so if you need to be able to chop and change then a subscription may not be quite right for you.

Other than that, though, you can’t go wrong with a car subscription!

Experience the freedom of a Drive Fuze car subscription

Giving you a level of freedom no other means of having a car can offer, car subscriptions are the future. With so many great benefits – from easy budgeting to short-term commitment – they’re a fantastic way to enjoy a hassle-free and convenient driving experience.

Browse our cars and see what you could be picking up the keys to next week…