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It’s an age-old question that has been casually dropped into conversation at...
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We do it for our mobile phones and even our television these days, so why not subscribe to a car too?
A new trend has emerged in the car industry, with both established and unlikely newcomers offering motorists the chance to simply subscribe to rather than buy their next car. While leasing a vehicle has long been an option for customers, this new subscription trend offers a new way to have access to a car without needing to buy.
Toyota has recently launched its Kinto service in Australia, which allows members to sign up to a fleet of accessible cars that they can book and use whenever needed; similar to car-sharing services like GoGet.
Kinto users can subscribe to the service without having to pay any membership fees, but instead uses a pay-as-you-go structure based on time and distance the car is used. It means that if you, for example, live in the city so only need a car occasionally, you can borrow a Yaris Hybrid to run around town. However, if you want to take a road trip with your friends, you can select a Kluger Hybrid from Kinto’s line-up.
Mark Ramsay, General Manager of Kinto, explained that offering an alternative to direct ownership is crucial to attracting new customers to Toyota’s range.
“We believe that everyone deserves the freedom to move, so we’re thrilled to be expanding Kinto's local offering and now offer Australians a car subscription that adapts to their lifestyle,” Ramsay said.
“We’ve seen the demand for short term and flexible mobility increase, and Kinto Flex is the nation’s answer to those who want all the benefits of car ownership for those who may not want to take the leap yet into purchasing their own vehicle.”
But it’s the likes of AGL Energy and Origin Energy that are the surprising new players in the car industry. With the rise of electric cars, the energy companies have seen an opportunity to try and drive EV uptake, thus increasing the need for their electricity, so have both launched subscription services.
These go beyond Toyota’s Kinto service and traditional leasing by providing members to change cars when needed and avoid a locked-in contract period with month-to-month options.
Origin Energy goes a step further, offering users the ability to salary sacrifice their car to get a tax advantage. Origin will even organise the logistics through your company’s human resources department.
Once someone signs up to one of these energy company plans, naturally they have to use the energy provided by the supplier. But you do get to swap cars as your lifestyle or budget changes. For example, the cheapest option in the Origin Energy scheme is the MG ZS EV for $244 per week, but if you want something more premium you can swap into a Tesla Model Y or Volvo XC40 for $336 per week.
Origin Energy’s program offers you both the choice to cancel on 30 days' notice or eventually make a final balloon payment and buy a car after an agreed time period in the same model.
While the total cost will vary on individual circumstances, it’s likely that subscribing to a car will ultimately end up costing you more than buying directly. But in a world when new drivers have grown up subscribing to every major service in their life, it’s likely that car subscriptions are here to stay and will only get more popular in the years to come.