The Truth About Car Subscriptions: Are They a Good Investment?
Car subscriptions give you access to a vehicle for a flat monthly fee. They may be cheaper than buying a car, but are car subscriptions worth it?
Owning a car in a big city can be a hassle. Parking alone can cost you a small fortune. Instead of buying or leasing a vehicle, you may want to consider a car subscription service, which gives you access to a car whenever you need it.
Although car subscriptions are cheaper than buying a car, are they actually worth it? You pay a flat monthly fee. Keep reading for all the details.
What is a car subscription?
A car subscription is where you pay a monthly fee for access to a car when needed. The monthly subscription fee includes car insurance, registration fees, and roadside assistance, but you’ll have to pay for your own gas.
How is a car subscription different than renting a car?
A car subscription differs from a car rental mainly by how long you can use the car. With traditional car rental companies, you usually rent a car for a short time, like a couple of days or a week, and pay a daily rental fee. Car subscriptions are more for people who need to use a car more often.
With a car subscription, you pay a flat monthly fee to access a vehicle anytime you need it. You also can access different types of cars. So you can get an electric sedan to visit friends in the Hamptons or a truck to pick up the new furniture you bought.
Car subscriptions are usually more affordable than daily car rentals. The average car rental is about $76 per day, according to the travel website Priceline. That’s over $500 a week, not including car insurance or gasoline. Meanwhile, a monthly car subscription plan with FreshCar starts at $499 and includes insurance.
Traditional car rental companies like Sixt, Hertz, and Enterprise have jumped on the car subscription bandwagon and offer their own subscription services.
How much do car subscriptions cost?
The cost of car subscriptions differ depending on what company you use, how many miles you plan to drive, and what vehicle you want. For example, renting a BMW X3 from Sixt+ will cost $869 per month versus a Nissan Sentra, which costs $649 per month.
Most car subscriptions charge a one-time enrollment or activation fee. The fees also vary depending on what car subscription service you use. Sometimes the car subscription company will waive the fees for special promotions or if you subscribe for a certain length of time. Porsche Drive charges a $595 activation fee but will waive that fee if you sign a three-month subscription.
Is a car subscription cheaper than buying a car?
When you buy or lease a car, you will most likely have monthly payments. On top of those payments, you’ll also have to pay for car insurance, registration, maintenance, and maybe even parking. Those costs could add up to a point where a car subscription may be cheaper than buying a car.
About 15 percent of drivers who financed a new vehicle in 2022 were paying more than $1,000 per month on their car payment alone, CBS News reports. On the other hand, a car subscription can cost anywhere from $99 to $1,700 per month and includes insurance, registration, and all repair costs.