In the past, taking up a subscription meant you got to keep the thing you subscribed to – think magazines, for example.
It also meant you’d get stuck with a thing that you mightn’t have wanted. Hands up who’s had a magazine subscription gifted to them at Christmas, only for unread issues to pile up on the side table…?
These days, however, subscriptions can take different forms.
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Now you can subscribe to a car – yes, a car! – and while you may not get to keep the vehicle in all instances, you can pay to use it for a period that suits you.
Car subscriptions have been around for a while now in Australia, and with interest in electric vehicles (EVs) increasing – but with some car buyers remaining tentative about actually buying a battery-electric car – there are options in the subscription scene that may make more sense than purchasing outright.
Why would you subscribe to an EV?
There are some concerns around retained value for EVs, so a subscription might be a terrific idea for someone who wants to sample what it’s like to live the ‘EV life’, without the commitment of actually committing to it.
There are established subscription businesses in Australia offering a mix of internal combustion engine (ICE), hybrid electric vehicle (HEV), plug-in hybrid EV (PHEV), and EV options, with plans that allow you to pick a car that suits your needs based on its size, price, specs, or powertrain.
Most subscription services also allow you to change the car you are driving if your requirements or your lifestyle changes.
That means that rather than mucking around and wasting time selling your old car to buy a new one, you can just switch to something else. It’s easily one of the biggest positives of this form of car custodianship.
Weighing up EV subscriptions
No tyre-kickers, no haggling hassles… it sounds like a dream ownership experience if you can make it work for your needs.
The point of a service like this is essentially to take the ‘ownership’ burden away from you and, again, it really makes a lot of sense for someone who is EV-curious but wants to try before they buy, particularly if they’re dubious about the retained values of EVs.
A number of existing car subscription brands are offering this sort of option for potential customers, and there are new players entering the EV subscription marketplace regularly, too – including energy companies that you would normally associate with paying your electricity or gas bill at home.
The majority of EV subscription plans also cover consumables like tyres, as well as ongoing maintenance considerations, and even charging at public recharge stations can be covered, not to mention the installation of a home charging station in some instances.
However, it is worth noting you will also need to make sure you read the paperwork around damage and usage conditions because, again, it’s not ‘your’ car, unless it becomes yours at the end of the plan.
Other considerations
Most EV subscriptions offer you the freedom to switch cars using a salary-packaged subscription plan.
In most instances you can choose to take up the subscription on a weekly repayment basis, and, if your employer allows it, you could pocket thousands of dollars in tax savings per year by salary-packaging an EV lease.
If, however, you decide that EV life isn’t for you, you can simply return the car with 30 days’ notice or choose a different car to replace it with.
Another neat consideration is that some subscriptions will get cheaper the longer you hang on to the car. These ‘anniversary discounts’ tend to cut the cost of your subscription payments down significantly to keep you in the same vehicle.
For the environmentally minded user, that could be a huge plus as it means you’re doing your bit to minimise the vehicle’s carbon footprint, and saving cash, too.
It’s a novel approach – imagine a telco cutting your monthly smartphone payments when a new device launched?
Energy companies are also aiming to get customers on board with EV subscriptions as well.
In Australia, for example, Origin Energy offers a form of subscription model that allows a user to choose a car, switch it if needed, and live the EV life without the outright commitment of purchasing a vehicle.
Is an EV subscription right for you?
The big plus of a subscription is that there’s no resale regret and, as stated, some subscriptions include the option for you to buy the car if you want to, at an agreed rate that could be cheaper than buying a used car from a dealership.
So, if you’re thinking about an EV, and you’re not sure if it’ll be the right car for you, a subscription may be a solid alternative to an all-in purchase.
You don’t need to think about what the resale value will be, you have the freedom to choose the right vehicle for your circumstances, and you could save big on tax, too.
We recommend that you seek your own independent legal, financial and tax advice when making any decisions in respect of the appropriateness of a subscription for your circumstances
