Sign of the times: car subscription is here

In case you haven’t been paying attention, new car sales are on the decline. Last month, the Federal Chamber of Automotive Industries reported that new vehicle sales have dropped across the industry by 8.9 percent and that new vehicle registrations last month were at their lowest since April 2011 – largely fuelled by the crashing housing market (ah, the irony).

Couple this with the cost of living, interest rates and financial uncertainty for some people and their families, and car share services make sense.

But what if that kind of commitment-free ownership could not just help those who have troubles buying a car, but also directly help the car sales industry to stay afloat? That’s where a brand new car subscription service, recently launched in Sydney and Melbourne, Carly, comes in.

As explained by Carly CEO, Chris Noone, the difference between car subscription, share, rental and lease is time.

Where car share is borrowing a car for up to a day, car rental is taking one for a few days and a car lease is often a locked-in three-year or more term with an option to buy, a Carly car subscription involves a minimal commitment and an ongoing monthly payment – just like a gym membership.

A 2012 Toyota Corolla is currently on the site from $182 per week

Essentially, the car is yours until you cancel or change your subscription. It’s not a rent to own plan; you don’t need to save up for a deposit and things like insurance, registration and maintenance are covered. And depreciation? Furghetaboutit.

“What happens if you go on a holiday or change your career, where you live or what do you do with your car?” asks Noone. “It will sit there and cost you money. A subscription has all the benefits of ownership, but it can be paused. If you want to save some money, you can downgrade the subscription and get a cheaper car. If you want to splash out for the weekend, you can get a more expensive car.”

To make life even simpler, Carly’s subscription service is completely online and once you click ‘subscribe’, the car is delivered to you - so no long hours spent signing paperwork at a dealership.

Some of the current cars on the website include a 2008 Hyundai Tucson, a 2015 Mitsubishi ASX and a 2017 Volkswagen Polo, all for under $180 a week.

You do have some restrictions and liabilities; a typical insurance excess on a Carly lease car on the entry level lease program is $3000, while kilometre restrictions also apply. A 2012 Toyota Corolla offered 1200km with its $182/week cost, with extra mileage priced at 30c per km.

Insurance excesses reduce and mileage limits increase if you opt for a more expensive subscription plan.

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A typical Carly selection

A subscription provides new channels for revenue and monetisation within the industry too, according to Carly. The vehicles “on fleet” are not owned by Carly, and could potentially be manufacturer ‘cars on grass’, ex-lease or ex-fleet dealer stock, and other vehicles that would otherwise be sold through the auction channels as a last resort to make some cash. It also gives older cars a new upcycled lease on life.

“We've actually been doing a roadshow around the major dealer groups and manufacturers talking about subscription, and they're very interested in this because they see that retail sales are declining,” says Noone.

With the industry making less money from new car sales and finance, subscription offers a way to get bums on seats - especially when it comes to those who will be refused long-term finance plans, can’t decide on the type of car they want, are wary of used cars or just don’t have a lifestyle that allows permanent car ownership.

“It allows people who don't really know what's happening in their future life to say, ‘There, I can get a car now’, and then have the security to change it if their needs change,” says Noone.

Will subscription put all of us at WhichCar out of a job and replace how we buy cars? Not really. “What we really say is if you expect no changes in your job, your lifestyle, where you live or your family size, you're probably better off buying or leasing or taking a loan for a car," admits Noone. "But if you do expect any changes the next three or four years, subscription is a very viable option to look at.”

Would you consider a car subscription? Tell us in the comments below!