The process of getting behind the wheel of a new car has changed drastically over the last few years.

Drivers no longer need to buy outright if they need a car, with flexible finance and leasing options becoming more common. These days, you don’t need to lease on traditional terms either, with car subscription services like HelloCars making it even more flexible for Aussie drivers. 

When social distancing guidelines came into place, car dealerships saw a significant decline in people visiting showrooms. There was an increase in customers exploring the idea of online sales and cars are no different

With car subscription, the entire process can be completed online, from the comfort and safety of your own home, which has been particularly appealing for consumers.

So what exactly is car subscription and how do you decide if it’s right for you?

In the market for a new car? The table below features car loans with some of the lowest fixed and variable interest rates on the market.

Lender

VariableNew1 year
More details
  • Available for purchasing new and demo vehicles
  • $5,000 to $150,000 loan amount
  • Redraw facility available up to $5000/day
  • Required: Good credit history, stable employment history. Aus citizenship or PR.

New Car Loan - Home Owner Special

  • Available for purchasing new and demo vehicles
  • $5,000 to $150,000 loan amount
  • Redraw facility available up to $5000/day
  • Required: Good credit history, stable employment history. Aus citizenship or PR.
VariableNew1 year
More details

New / Demo Car Loan (Variable)

    FixedNew99 years
    More details
    Loan amounts from $2k to $75k
    • Available for any new motorised vehicle
    • No ongoing or early exit fees
    • 1-7 years loan terms. Pay monthly, fortnightly, or weekly
    • Get quick decision. Funds in 24 hrs if approved
    Loan amounts from $2k to $75k

    New Car Loan

    • Available for any new motorised vehicle
    • No ongoing or early exit fees
    • 1-7 years loan terms. Pay monthly, fortnightly, or weekly
    • Get quick decision. Funds in 24 hrs if approved
    VariableNew1 year
    More details
    • Discounted rate on qualifying electric cars
    • Up to 7 yrs loan term
    • Redraw available up to $5,000/day

    Green Car Loan

    • Discounted rate on qualifying electric cars
    • Up to 7 yrs loan term
    • Redraw available up to $5,000/day
    Important Information and Comparison Rate Warning

    All products with a link to a product provider’s website have a commercial marketing relationship between us and these providers. These products may appear prominently and first within the search tables regardless of their attributes and may include products marked as promoted, featured or sponsored. The link to a product provider’s website will allow you to get more information or apply for the product. By de-selecting “Show online partners only” additional non-commercialised products may be displayed and re-sorted at the top of the table. For more information on how we’ve selected these “Sponsored”, “Featured” and “Promoted” products, the products we compare, how we make money, and other important information about our service, please click here.

    The comparison rates in this table are based on a loan of $30,000 and a term of 5 years unless indicated otherwise. The comparison rates for car loans and secured personal loans for the relevant amounts and terms are for secured loans unless indicated otherwise. The comparison rates for unsecured personal loans are applicable for unsecured loans only. WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. Comparison rates are not calculated for revolving credit products.

    Monthly repayment figures are estimates only, exclude fees and are based on the advertised rate for the term and for the loan amount entered. Actual repayments will depend on your individual circumstances and interest rate changes. Rates correct as of June 24, 2024. View disclaimer.

    What is a car subscription?

    It’s just like any other type of subscription service - you sign up to different services for movies and music, and you sign up to a car subscription service for access to cars. Subscriptions are often confused with car-sharing which allows you to rent a car when you need it.

    However, a car subscription is more like a phone plan - it allows you to get behind the wheel of a new car through small weekly payments and no lock-in contract. This means you can return a car when you no longer need it or swap it for a different car if your needs change e.g. switching from a small sedan to an SUV as your family grows.

    You don’t need to go directly to a car subscription company either – Loopit.co is an Australian company that’s making it possible for car dealerships to offer the service. So, you can head to your local dealer showroom or even their website and subscribe directly from there.  

    Are subscriptions just a short-term solution?

    According to Forbes, by 2025 1.9 million cars on Australian roads could be subscription based, which is 10 percent of all the cars currently registered in the country.

    This prediction requires a shift in how we view car ownership, and it’s a change we’ve seen accelerated due to coronavirus. With millions of Aussies now out of work or working from home, most cars have remained off the road during the pandemic.

    Car sales have also been declining, signalling a new normal post COVID-19; people will be wary of taking on car loans, more of us will continue working from home, and cashflow will be a priority.

    This will lead to fewer full-time car owners, and an increase in flexible alternatives. While more of us move away from the traditional model of car ownership, car subscription services will continue gaining popularity. 

    How much does car subscription cost?

    Car subscriptions can often mean cheaper weekly repayments than if you buy a car on finance or take out a loan. For example, with HelloCars you can get a car from as little as $119 a week, which will get you something like a 2011 Ford Focus.

    Obviously the price depends on the car, so it will cost more for newer, bigger models e.g. the 2015 Ford Territory is available for $202 a week. Over many years the repayments will add up, but compared to buying a car outright, subscribing has a much lower upfront cost.

    The subscription company usually covers the registration, insurance, regular maintenance and unexpected repair costs, so you just need to pay for petrol and the weekly fee.

    If you’re not sure if it’s right for you, there is an online calculator available so you can see how much you can save if you choose to subscribe over buying. 

    What are the pros and cons?

    Pros:

    • You don’t need to worry about standard costs of owning a car, including insurance or registration. For those of us working at home, it means avoiding these ongoing expenses while your car is left idle. 
    • The car will be under warranty while you have it, so you don’t need to cover any unexpected repair or maintenance costs. 
    • 24 hour roadside assistance and customer care seven days a week are usually also available for added peace of mind. 
    • You aren’t locked into any one car.  Once you’ve signed up to your plan, you can swap your car for another one every few months. For example:
      • You can test out a model you like before you decide whether you want to spend your money on it. 
      • If you need to drive for a short period during the year, then it’s easier and cheaper to subscribe for a few months and take back the car when you’re done.

     Cons: 

    • Subscriptions are not the same as “rent-to-own” plans, which means your payments don’t go towards the price of a car.  So even though you can swap the cars frequently, you will always need to return the car in the end. 
    • The weekly fees for car subscriptions are often based on a distance that the average person drives, so there is a limit on your kilometres. If you go over the limit while you have the car, there’s usually a fee for every kilometre you go over the limit. 
    • While usual wear and tear is fine, if you get more than a few scratches or damage any of the interior you might need to pay an additional fee when you return it. You also can’t make any modifications to the car as you would if you owned it.