Car subscription: what is it and how does it work?

July 15, 2022 by

It’s not just magazines and newspapers you can subscribe to, but cars as well; we explain how the process works

Car subscription services arguably represent the biggest shake-up in how we finance our cars since the Personal Contract Purchase (PCP) arrived back in the 1990s. The idea is simple: instead of buying a car outright, or leasing it over several months or years, you get the car on subscription, which you can opt in and out of with far greater flexibility than is offered by a PCP deal. There is, obviously, more to it than that, which we’ll go into here.

How does a car subscription work?

Each subscription will work in its own way, but the general pattern looks something like this:

  • You choose the car you want
  • You pay a monthly fee
  • You get the car, inclusive of tax, insurance, breakdown cover and servicing
There are, naturally, variations to this pattern. Some subscription firms require no deposit, others charge a one-off joining fee. Some services allow you to change the car or stop the subscription after one month, others require you to sign up for longer – typically three months. Most, however, include maintenance, insurance, road tax and breakdown cover, leaving you with a single monthly payment.

What car subscription services are there in the UK?

Car subscription firms are operated by two types of company: dedicated firms that allow you to choose from cars from a number of different brands, and subscription services run by car companies themselves.
Standalone subscription services include the firm Onto, which focusses on electric cars only. From £489 a month for a Renault Zoe, to £1,299 a month for a Tesla Model 3, Onto requires no deposit, and only asks for a one-month minimum commitment, with all costs, even EV charging, included in that price. There is a 750 miles a month mileage cap, though, while there is also £99.50 delivery charge, and the same again for when the car is collected.
Subscription firms operated in the UK by car companies currently comprise: Care by Volvo; Mocean by Hyundai; Pivotal by Jaguar Land Rover; and Flexibility by Genesis

Care by Volvo

Care offers two packages: one that lets you cancel or change Volvo after three months, and one that ties you a specific car for three years. The three-month package is more expensive per month, but both include insurance, servicing, road tax and breakdown cover – essentially everything bar fuel is included in the price – even tyres are covered, if these wear out. Prices range from £459 a month for an entry-level Volvo XC40, to  £1,129 a month for a top-of-the-range XC90 plug-in hybrid.

Mocean by Hyundai

Care by Volvo lets you choose from any model in the maker’s range, whereas Mocean offers a sample of Hyundai models to choose from. You do get a little more flexibility in how long the subscription runs for though, with thee, six, 12, 18 and 24-month contracts – you’ll commit to a specific car for however long the contract you opt for runs. As with Volvo, all costs aside from fuel are included in the price, although your age will affect the monthly price, with under 30s paying more than the over 65s. Prices range from £287 a month for a Hyundai i10, to £498 a month for an Ioniq EV. Those prices assume a 24-month subscription, though – shrink the terms to three months and the Ioniq rises to £629 a month. You’ll also need to factor in insurance, which ranges from £48 to £93 a month, depending on your age.

Pivotal by Jaguar Land Rover

Jaguar Land Rover’s Pivotal scheme allows you to cancel after three months with no penalty, and allows you to change cars every six months.  There are four price bands, named Blue, Indigo, Violet and Ultraviolet, with prices Blue costing £850 a month and giving you access to models like the Jaguar F-Pace and Land Rover Discovery Sport; Ultraviolet is the most expensive option, at £2,000 a month, and this gets you the full-fat Range Rover.

Flexibility by Genesis

Genesis is the posh arm of parent company Hyundai, and its subscription service operates on a minimum six-month contract. An illustrative 18-month contract will cost £1,122 for a GV80 SUV.

Is a car subscription right for me?

Car subscription services offer greater flexibility than conventional leases, but they are also more expensive than traditional PCP contracts. If you value convenience above all else and like the idea of changing car every few months, a subscription service could be worth considering. It’s also an excellent way to find out how an electric car would fit into your life, without having to fully commit to one.

The best thing to do if you’re considering a subscription service is to crunch the numbers: work out how much it would cost you to lease, insure, tax and maintain a car using traditional finance, compare this to a subscription package, work out how much you want to be able to change cars regularly, then make your decision.

Car subscription: anything else to know?

Each subscription service will have different terms and conditions; you only need to be 25 to join Hyundai’s scheme, but Jaguar Land Rover has a minimum age of 28, for example. There will also be wear and tear clauses in the contract, so check what is considered normal by this, and what could leave you liable for extra costs. Also bear in mind each contract will have a monthly mileage allowance, with charges if you go over this, while consider who else will be driving the car, and make sure there are no restrictions about another party driving the car, both contractually and in terms of insurance.

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