Tired of waiting for your new Toyota RAV4 or Ford Ranger? A car subscription service might be a shortcut to a new car, but there are things you might not like when you subscribe

Tried buying a new car right now? It ain’t easy, especially if you’re shopping in a popular segment for a popular model, with wait times stretching to a year – or more – for stuff that’s in high demand like mid-size SUVs and hybrids. 

The second-hand market offers little respite. While the second-hand market can provide you with a car straight away, both private sellers and used car dealers have kept an eye on the broader market and are pricing their cars accordingly. For some cars, finding a second hand option that’s UNDER the retail price when it was brand new can be tough.

But can a car subscription be a way of side-stepping the shortage, at least until supply catches up to demand? Could you nab yourself a new(ish) set of wheels within a matter of days rather than waiting more than half a year for your next vehicle? 

As CarsGuide reported back in April, demand for car subscription services has tripled since the end of last year. Are they a viable option, or is that surge in demand the result of consumer desperation? Let’s take a look at what’s on offer, and whether opting for a subscription is actually a good idea.

Right now, car subscription services in Australia generally fall into two categories: a true car subscription where you’re receiving a near-new vehicle owned by a car manufacturer (or their service partner) and hanging onto it for a while, or car-sharing services where you’re subscribing to a service rather than a specific vehicle.
 
With the bulk of Australian drivers still preferring to have a car parked in their driveway rather than ad-hoc access to a street-parked share car, we’re really going to just be talking about the former type of car subscription. Think of it like a long-term car rental, rather than a rent-as-you-need type of arrangement.

Within that category there are quite a few options - some are fully backed by specific carmakers, while others are brand-agnostic. Kinto is a subscription service run by Toyota, with the entire menu of available vehicles hailing from that brand, and all being current-generation models. Though you won’t find everything from a Toyota showroom on offer, the Kinto line-up does encompass everything from the Yaris up to the Hilux, with a three-model SUV range consisting of the C-HR, RAV4 and Kluger - the Yaris Cross, Landcruiser, Prado and Fortuner aren’t available, at least not yet. 

Kinto does allow short-term rentals (by the hour or by the day), much like other services like GoGet and Popcar, but we’ll focus on their longer-term 30 and 60-day options. Using a RAV4 as an example, it’ll cost you $1796 per 30 days to put one in your driveway as a continuous rental, while a 60-day loan brings a slight discount and costs $3335. Note that Kinto charges by the kilometre as well - each kilometre you put on the odometer adds between 24 and 27 cents to your invoice, depending on your loan duration. 

Now, let’s say you’re using the subscription as a stopgap while you wait for a new car to be built and delivered - right now, six month waiting periods are not abnormal. Over that six month period, assuming you’re able to secure three 60-day loans in a row, that Kinto RAV4 will cost you $10,005 plus whatever you rack up in distance charges. Considering the average vehicle drives around 13,000 in a year, six months of driving would likely result in around $1560 of distance charges. On the upside you won’t need to pay for fuel, insurance or registration, though tolls are an additional cost.

Is $11,565 a reasonable cost for using a car for just six months? Arguably not for the average Australian household. There are cheaper options out there - a 2018 Toyota RAV4 via a Carbar subscription would cost just under $10K for a continuous six month loan, but that doesn’t include fuel. Meanwhile Europcar’s ‘Superflex’ long-term rental scheme can get you into a Mitsubishi Outlander “or similar” (we don’t like the sound of that) for $1484 per month, or $17,808 for a full year. 

Want something fancy? Some subscription services might actually have something from the premium end of town for you (after all, most of them actually draw their fleets from used car dealer stock, so what’s available in your area can vary wildly), and Jaguar have also teamed up with Carbar to offer long-term F-Pace loans on a bespoke subscription plan. Overseas, Volvo claims its ‘Care by Volvo’ subscription scheme to be a commercial success, though that offering has yet to make it Down Under.

But is this all a viable alternative to simply owning a car outright? For some, perhaps it will be. Those who don’t need a car year-round might find value in just borrowing a car for a month or two at a time, while those who simply want more variety in the cars they drive might gravitate to services like these as well, as they can swap and change cars as much their heart desires. Bundling all of a car’s running costs into one simple monthly payment is an attractive idea too.

However for suburban Aussies – in other words, the vast majority of us – having a car on a part-time basis is a no-go, and for people who need to have a car at their disposal all the time, a car subscription is a very expensive way to do it. 

Data obtained by the Australian Automobile Associated in 2019 put the average transport costs (finance repayments, maintenance, fuel, tolls, rego and insurance) of a two-car household to be just under $17,000 per year, extending to $18.6K for metropolitan households. That’s for TWO cars. 

Compare that with the aforementioned Kinto RAV4, which costs just over $20K for a full year’s worth of driving, and will keep costing that for as many years as you use it. And unlike a fully-owned car, you won’t be able to recoup its market value when you get rid of it either. 

Other services can be cheaper, like Europcar’s option that puts a mid-size SUV in your hands for $17.8K a year, but you arguably won’t have the luxury of choosing the exact brand and model that you want – you’ll be at the mercy of whatever’s in their inventory at the time you begin your loan. There are also some limitations on how you can use these cars – towing is often forbidden, and even driving on a gravel road might see you breaching the terms of service.

In short, yes, a car subscription might be a good way of getting you out of whatever car drought you’re currently in, and as a short-term measure there’s nothing wrong with taking advantage of that service. However, while the all-inclusive cost aspect can be attractive, it’s certainly not the most affordable method of car ownership. In fact, it’s not “ownership” at all.