Are car subscriptions worth it?

The smarter way to lease a car. 

Is it really though? 

We’re all about car subscriptions at elmo, it’s our thing, but what if you’re new to the concept or aren’t sure if it’s right for you? What are the drawbacks?

We’ll go through and unpick the car subscription, honestly, so you can make an informed decision for yourself.

An elmo branded Polestar 2 electric car on show at the British Motor Show in 2022.
One of our Polestar 2 electric cars on show at the British Motor Show in 2022. 

What is a car subscription?

Let’s start from the very beginning (a very good place to start, etcetera).

Albeit a familiar concept in entertainment, subscriptions for cars are still seen as a somewhat new idea. You pay a fixed monthly amount and that gives you access to something, on demand, for as little or as long as you like. We’ve been doing it for ages with Netflix and Spotify, but how does that work with your wheels?

A car subscription is car ownership simplified.

So simple, in fact, you don’t ‘own’ the car at all. Stay with me on this…

You pay a fixed monthly fee (your ‘subscription’) and that usually covers: the cost of the car, your insurance, vehicle excise duty, servicing and maintenance, breakdown cover and fair wear and tear for tyres too.

Some subscriptions will also let you add things like additional drivers or public charging (if your chosen car is electric).

In most cases you’ll not need an upfront deposit either, meaning your first payment is your first month on subscription with the car. That means they can give more people easier access to the latest vehicles on the road, without shelling out huge sums of money from the onset.

How are car subscriptions different to leasing and buying?

A FIAT 500e parked in London.

You’ll find a summary of the differences on our website, but in short:

  • Leasing a car is similar in that you’ll pay a monthly fee for the car but with a lease you’ll still need to get some of the extras yourself (namely insurance and servicing). Though, some companies may let you add servicing onto your lease package. They generally include road tax/vehicle excise duty and breakdown cover as part of your leasing payment.
  • This does mean though that despite leasing seeming more affordable at first glance than a subscription, it may end up costing you more by the time you’ve added everything else on and costed everything up. Plus, you’ll get no support in arranging all of those extras.
  • You’ll also likely need to pay an upfront deposit for the lease too, which on an elmo car subscription (for example) you don’t.

Similarly, when buying a car outright, you’ll have to arrange all the necessary extras yourself and there’s no option to have this bundled into your monthly payments (if you were to finance a car). Buying a car can incur a really high upfront cost, limiting your options when it comes to what models you can get access to, and don’t forget if you own the car outright, you’ll need to consider depreciation as well.

Subscriptions opens a few more doors much sooner than leasing or buying because you’re not having to save for months/years to get the car you want or need.

But what if you don’t mind shelling out a few grand upfront? Are subscriptions worth it then? Let’s take a look…

What’s better with a deposit: leasing or subscription?

One of our Renault ZOEs on display at the British Motor Show in 2022.
One of our Renault ZOE EVs on display at the British Motor Show in 2022.

Here’s a scenario for you.

You’re after a stylish, small city car that’s plenty of fun but has a decent range. You do 10,000 miles per year and it’s just you who’ll be driving the car. You decide on a FIAT 500e in Icon trim.

You’re not bothered about owning the car because you like to change it up every few years anyway.

A leasing example

You do some digging online and find the following deal:

A leasing deal found by elmo on LeaseLoco.
Lease deal found on LeaseLoco in September 2023.

This is a lease deal we found on LeaseLoco in August 2023 and was the first one that came up when we searched online.

The headlines are:

  • You’d pay £4,178.88 upfront
  • You’re tied into a leasing agreement for four years
  • The car would cost you £464.32 per month for those four years which doesn’t include insurance or tyre maintenance
  • And you’re limited to 10,000 miles per year with excess mileage fees applying at the end if you go over.
The plus points to this deal
You get a brand-new vehicle which one else has owned or driven before
It’s in stock and can be delivered to you within a month
Road tax and breakdown cover is included
The negatives to this deal
You have to pay a large upfront deposit of over £4,000
You’re tied into the contract for four years and won’t own the car at the end of it
You’ll need to arrange insurance and tyre maintenance yourself

A subscription example

So, what about a subscription?

An example of a FIAT 500e Icon subscription
Subscription deal found on elmo in September 2023.

This is our subscription deal in September 2023. 

The headlines are:

  • You’d pay no extra upfront deposit – your initial payment is your first month on subscription
  • You can choose between a 60-day or 12-month minimum term
  • The car would cost you from £429 per month (for a 12-month minimum term) or from £477 per month (for a 60-day minimum term)
  • And you’re limited to 800 miles per month, though you can add miles to your subscription as you go to avoid excess mileage fees.
The plus points to this deal
The subscription is flexible and it’s up to you when you stop
If you can book that means it’s in stock and could be delivered to you within a week
Insurance, breakdown cover, vehicle excise duty, tyre maintenance and congestion charge are included
The negatives to this deal
The vehicle may not be brand new and could have a few thousand miles on the clock
You could be limited on choice of car colour as it depends on what’s available for subscription at that time
You won’t earn no-claims bonus while on subscription

Most subscription companies will also have a team of people on-hand to support you with your car if you need it. elmo, for example, have a group of EV Specialists that are available week-by-week if you have any questions about your electric car.

Plus, electric car subscription companies often introduce helpful features to help their subscribers live better day-to-day, like easy access public charging or discounted home charge points.

Leasing vs subscription overview

Leasing is the bigger commitment and can be more hassle/take longer to arrange than a car subscription. But car subscriptions could limit your options in terms of what cars are available and you may not always get a brand-new vehicle.

Ultimately, if you crave flexibility (or need it for your lifestyle!) then a short-term subscription is far better than leasing. Don’t discount longer subscriptions either if you want to avoid the hassle of having to do everything yourself or want to bypass the astronomical upfront costs.

So, are car subscriptions worth it?

If you’re looking to try a new car on the short-term before you commit, or don’t want to be forced into paying thousands of pounds upfront for a new (or nearly new) car, then car subscriptions are something you should definitely consider.

If you’re not bothered by being tied into a long-term contract or setting up insurance and servicing etc. yourself, then leasing could be the better option for you – but do work out whether it’ll actually be cheaper because in quite a few cases, it might surprise you it’s not.

Want to find out more about electric car subscriptions?

Speak to our team – we’re around to help!

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