More and more people who are alerted to the possibility of having all the expenses of owning a car paid for (except fuel) in one monthly fee package with the added advantage of handing the car back with one month’s notice without penalty if they are laid off, are finding the concept increasingly attractive compared with the complicated and expensive process of quitting a car that is subject to a finance or lease deal over years.
Carly, Australia’s first flexible car subscription provider, is saying that car subscription is emerging as a genuine alternative to car purchase and leasing across the country, with almost four in 10 Australians (38 per cent) now considering subscribing to a car.
The company says that the impact of Covid-19 on the economy has many Australians re-considering their financial commitments and how they can de-risk their finances.
This shift has been found to be more prevalent in part time workers.
New research commissioned by Carly surveyed more than 1200 Australians and has found that with the current upheaval in the Australian economy, 48 per cent of part-time workers would consider car subscription instead of buying a car.
This shift towards subscription is more prevalent in part-time workers, where 48 per cent are now considering car subscription compared to full-time workers (44 per cent) or people not working at all (28 per cent)
Nearly 70 per cent of 18-34-year-olds would consider a car subscription, with a preference for a no-strings-attached subscription option, suggesting it is attractive to those either young or currently studying.
Part-time workers face difficulties securing finance for a car, especially those who are currently being paid under JobKeeper. Carly says that subscription can circumnavigate that obstacle with minimal risk and no need for a deposit.
Carly’s research found that 48 per cent of those considering car subscription have either a university degree or are currently studying at university.
Of the 31 per cent of Australians currently extremely or very worried about their financial situation due to the pandemic, 46 per cent would consider car subscription, and 24 per cent are more likely to choose it now.
Carly said in a statement: “Part-time workers face difficulties securing finance for a car, especially those who are currently being paid under JobKeeper. Car subscription can circumnavigate that obstacle with minimum risk and no need for a deposit.
“The two key features of ‘capped costs’ and no deposit make it financially viable for part-time workers to have access to a car without the risks associated with being locked into a lease or loan.”
Carly CEO Chris Noone said: “Car subscription is a serious consideration for many Australians at the moment as they look at different ways to access a car in light of Covid-19.
“For more Australians than ever, a subscription model presents a familiar and risk-free alternative to a big financial outlay and our figures support this, with a 43 per cent increase in subscriptions in June (vs. March 2020).”
Carly cited the case of Sydney-based part-time retail worker and university graduate, Sophia Phillips. The 23 year-old found herself without a car when her vehicle was suddenly recalled due to faulty airbags at the beginning of March.
At the same time, her retail shifts were being cut due to the pandemic, so she wasn’t in a financial position to commit to purchasing a car. Ms Phillips wanted to avoid public transport but still needed to get to work, go to the gym and meet up with friends.
For Ms Phillips, a car subscription was the ideal solution.
“I rely heavily on my car, especially when travelling to and from work,” she said. “My hours vary each week working in retail and while I am not always travelling in peak hour, I still do not want to be taking public transport if I can avoid it.
“I think a lot of people would still prefer to drive, so Carly is one way you can do it without the long-term financial commitment or worry about hidden costs, as everything like rego, insurance, maintenance and road assistance is all included. It makes managing a budget easy,” Ms Phillips said.
By John Mellor