Owning and maintaining a car can be a much bigger financial commitment than you first realise. There are many hidden costs associated with buying, financing, and owning a car that can significantly impact your finances. If you need flexibility, are not planning to own the same car long-term or your circumstances may suddenly change, then car subscription could be a much more flexible option that will actually save you time and money.
Daniel needs a car during footy season to run his kids to training, weekend games and also for work commitments. Footy season only runs for 6 months of the year. The other 6 months there is no need for his family to have a second car, it would not get used and would be a drain on their finances.
Instead, Daniel subscribed to a brand new Hyundai Tucson and will save $4,026 by subscribing instead of borrowing money to buy a secondary car.
The Jones Family were 6 months into their lease on a brand new 2019 Toyota Corolla when they unexpectedly found out they were pregnant with twins. With an 18 month old still in a car seat and two on the way, they knew they were going to need to upgrade to a bigger family SUV to accommodate the needs of their growing family.
Locking themselves into a lease during a time when their family was growing and needs were changing, meant the Jones were faced with hefty break-lease costs when they needed to upgrade their vehicle. Under these circumstances, subscribing to a vehicle would have saved them money and incurred no financial penalties when they needed to change and upgrade.
Rebecca has secured a freelance contract that requires her to drive to and from work. She knows the contract will continue for at least six months but is uncertain if it will be extended. . She will need a car while she is working however she doesn’t want to lock herself into a long-term financial commitment or have the hassle of ownership. She is looking for the easiest, most cost efficient way to get access to a reliable car.
Rebecca decided to subscribe to a 2019 Mazda 3. Not only did she save money, she also didn’t have to worry about setting up insurance or registration for the car.
Grandparents Nancy and Jim escape the Sydney Winters by living in their second home in central Noosa for 4-6 months of the year. During their time in Noosa they either ride bikes or catch an uber and have no need for a car.
Rather than buy a car and have it sit idle and depreciating for 6 months of the year, Nancy and Jim decided to save money by subscribing to a Kia Sportage while they are living in Sydney.
Alex was offered his dream job in an up and coming start-up and celebrated by rewarding himself with a brand new Toyota Corolla. Six months later the company ran into financial difficulties and had to make Alex’s position redundant. Alex was now no longer able to afford his car payments and had to break his lease early, incurring a huge financial loss.
By taking on a lease he entered into a long-term financial commitment and when he was no longer able to make the payments he was liable for substantial penalties and break costs If Alex had subscribed to the same car he would have saved $7,597 and incurred no debt.
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*Costs considered when calculating a comparison between owning, financing and subscribing. Calculations are based on ownership and operating costs for one year.
Loan Interest Repayments, Comprehensive Insurance, Registration + CTP, Servicing and Maintenance, Tyres (based on RACQ 15000 av. per year @1.45c/km), Depreciation