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Buying a car vs car subscription: Which one should you choose?

Do you buy a car, or do you subscribe to one? (Source: Getty)

These days, big assets like houses or cars are major commitments and might not be worth the money for those constantly flying between cities for work or family obligations.

But a burgeoning circular economy could see things like car subscriptions allow consumers to have a car for only as long as they need.

So what’s more worth it: buying a car, or a car subscription?

According to HelloCars co-founder Michael Higgins, here’s what you need to weigh up:

1. Affordability

Naturally, cost will be one of the biggest factors when you’re deciding between a car or a car subscription.

According to the Australian Automobile Association’s March 2019 transport affordability index, the weekly costs of owning a car for the typical household will be anywhere between $67 and $74.27 (this doesn’t include the upfront cost of buying it).

A car subscription with Carly starts at $115 a week, or $129 a week with Carbar or HelloCars.

Choose a car subscription if… you want lower weekly repayments and more in your budget until next pay day, and you can’t afford the upfront costs of buying a car, Higgins advises.

Choose a car if… you plan to have one for the foreseeable future. “Buying a car has a bigger outright cost – plus the registration, insurance, regular maintenance and unexpected repair costs - but if you’re going to keep the car for 10 years then it might be worth spending that extra upfront,” he said.

2. Flexibility

Choose a car subscription if… You want to play around with different cars, or you want to give a car a test run before you buy it. It also means you can adjust to your needs, so if you’re going camping, you can book a 4x4. A car subscription is also a convenient option for those who only need it for a few months, according to Higgins.

Choose a car if… You have a fairly stable lifestyle and a regular routine where you know you’ll regularly use a car, or you have your eye set on a certain vehicle.

3. Usage limitations

Choose a car subscription if… You won’t be driving more than the average person. The weekly fees you’ll pay for a car subscription are often based on the distance driven, so one too many cruises might mean a fee for every kilometre over the limit.

Choose a car if… You don’t want any kind of restriction on how far you need to drive. A car might also be a better option if you don’t want to pay fees for any damage beyond a few scratches or interior damage. “If you own a car, it’s yours so you can do whatever you want with it,” said Higgins. “You don’t need to keep it clean and you can also modify it whenever you want!”

4. Paperwork

Choose a car subscription if… You don’t want to worry about the typical costs and concerns of car ownership like insurance or registration. “With a subscription service, all you need to do is pay your weekly fee, the cost of petrol and tolls, the subscription company will take care of the rest,” Higgins said.

Choose a car if… You want the peace of mind of owning your own car, which is yours to use whenever you want and that this outweighs the paperwork of insurance, registration, maintenance and repair that comes along with it.

5. Owning an asset

Choose a car subscription if… You’re not interested in owning a car, and you’re fine to pay the weekly costs without owning it at the end of the day.

Choose a car if… You want to be paying for something that’s yours at the end of the day. “If you own the car, even though it’s a depreciating asset, you can keep driving it, trade it in for a new model or sell it for extra cash.”

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