Car Subscription vs Car Lease

With a car lease you’ll have to sign up for the full duration of the lease term, which is usually around three or four years. But this can be a problem if your circumstances change – as they often do in life. For example, what if you decide to relocate internationally or a new job means you’re better off using public transport instead of driving?

Terminating a lease on a car you don’t need anymore can be incredibly costly. Typically, lease providers apply a fixed penalty of a few months’ repayments, or they might even require you to pay out the remainder of your lease, which can run into the thousands of dollars. With a car subscription provider such as Carly, you can cancel with 30 days notice at any time after your first 30-day subscription period with no additional penalties or costs to pay.

If your requirements change – such as needing a bigger car to accommodate children – trying to change cars while under a leasing arrangement can leave you in a bit of a bind. If the terms of your lease will allow, you could buy the car, sell it and start over. However, you could still be liable for termination fees and/or the costs of depreciation. 

Car subscription services are designed to give you pain-free flexibility around switching cars. With Carly, the cheapest pricing plan will allow you to change your car as frequently as once a month while the Large plan allows up to two vehicle changes every month. And there are no additional charges for switching either. 

It’s an easy detail to miss, but it’s important to check the mileage restrictions and excess mileage charges on your car lease or subscription plan. 

Unlike a car lease, with a car subscription you can adjust your pricing plan at any time so you can ensure you’re always covered for the distance you need to travel. While Carly’s cheapest subscription plan includes over 14,000 kilometres every year, this can be increased to over 43,000 kilometres every year (2,800km per month) on the Large plan.

Setting up a long-term car lease can be a convoluted process which takes a lot of research before you can begin negotiating the terms of your agreement. Then, there will be plenty of forms and documents to send off as part of your application before you find out whether you’re approved. 

Signing up for a car subscription is a much simpler process than leasing a car. With a fast, easy and completely online application process, you won’t have to visit a dealer to sign forms, while your chosen car could be delivered to you within 24 hours of signing up. 

Like subscription services, car leasing arrangements often include insurance and roadside assistance as part of your monthly payment schedule, but it’s still important to check for any other administrative charges or upfront payments that might be added to your lease agreement. 

While subscription services can vary, Carly doesn’t have any upfront payments. But the biggest benefit of a car subscription over a car lease is the ability to hand the car back on short notice without any penalty charges or lump sum payments. On the other hand, at the end of a lease you’ll have to pay a substantial balloon (or residual) payment which is calculated based on the car’s depreciation value since you signed up for the lease. The residual payment is usually higher or lower depending on the amount you agreed to pay each month throughout your lease.

It goes without saying that any leased vehicle will suffer some noticeable wear and tear – especially if you’ve taken possession of a shiny brand-new car for a few years. The problem is, even though leases often stipulate that normal wear and tear is covered, it’s rarely clear what this really means. Consequently, you could find yourself surprised by bills of a few hundred, or even thousands of dollars to fix up what you thought were just superficial scratches and dents here and there.

Because of the frequency with which you can change your car with a subscription service, wear and tear over time is far less likely to be an issue. In any event, the included insurance should have you covered for any unfortunate incidents.

So if you’re looking to get a car, there’s plenty to think about when comparing a car lease versus a car subscription. The main thing is understanding what’s right for you. From a Carly perspective, it's only a 30 day commitment so you can test a car (and Carly) and see if its a service that’s right for you without the stress of being locked into a contract or not having the financial freedom you might need in 6-12 months time. Give the team at Carly a call (1300 558 430) or send them a message to find out more.