What is a Car Subscription? The Flexible Alternative to Traditional Car Ownership
What is a car subscription? With years of industry experience at Mercia Fleet Management, we have a solid understanding of car subscriptions and how they can work for you. In this post, we’ll break down the ins and outs of car subscriptions, covering what’s included, how they work, and whether they’re a better choice than buying or leasing a vehicle.
What is a Car Subscription Service?
A car subscription service is a flexible way of accessing a vehicle without the long-term commitment of buying or leasing. Think of it as an all-in-one solution where you pay a monthly fee that typically covers not just the car but also essentials like insurance, maintenance, and sometimes even breakdown cover. Instead of locking into a long contract, you have the freedom to use the car as needed, with many subscription plans allowing you to swap vehicles or adjust terms to suit changing needs.
How Does a Car Subscription Work?
Here’s a step-by-step look at the car subscription process, from researching your options to the end of your agreement:
Step 1: Research and Choose Your Provider
The first step is to explore providers and subscription plans to find the one that best suits your needs. Providers offer various vehicles and terms, so consider factors like monthly costs, vehicle types, included services, and flexibility options. Be sure to check for customer reviews to gauge reliability and service quality.
Step 2: Select Your Vehicle and Plan
Once you’ve found a provider, you’ll select the vehicles that best fit your company needs. Most subscription services allow you to browse through a range of models, often organised by categories. When choosing, you’ll also decide on your subscription length—typically, you can pick from short-term temporary car options like one month or longer terms that stretch to a year or more.
Step 3: Set Up Your Subscription
After selecting your vehicle, you’ll go through a straightforward application process. This usually includes a credit check, verification of your employees’ driving history, and any other standard paperwork the provider requires. Once approved, you’ll receive a breakdown of your monthly costs, which typically include insurance, maintenance, and sometimes extras like roadside assistance or breakdown cover. The goal here is transparency, so you know exactly what’s included in your monthly payments.
Step 4: Arrange Collection or Delivery
Once everything is confirmed, you’ll arrange to either pick up the new car or have it delivered. You’ll receive the car fully maintained and ready to drive, with all documentation provided so your employee can start using the car straight away.
Step 5: End of the Subscription Term
When your subscription term comes to an end, you have a few options. Most providers will give you the choice to renew the subscription, switch to a different vehicle, or simply return the car. If you decide to return it, you’ll arrange a drop-off or collection, and the vehicle will undergo a final inspection to ensure it’s in good condition. Many providers operate with a simple handover process, so there’s no hassle or hidden fees if the car’s condition matches the agreed terms.
The Result
Throughout the subscription, you’re in control of the experience. Car subscriptions are designed to offer a practical, flexible solution that adapts to your business needs, whether you need an electric car for a short period or prefer the convenience of an all-in-one service. With everything managed in one monthly payment and the option to adjust your terms, car subscriptions offer a straightforward alternative to traditional car ownership.
How Much Does a Car Subscription Cost?
Car subscription costs vary depending on the type of vehicle and subscription length, with everything covered in a single monthly payment, including insurance and maintenance.
Here are some examples of car subscription rates for electric vehicles:
Basic electric cars: Affordable options like the Toyota BZ4X and Volkswagen ID.3 cost around £750/month, while the MG4 and Kia Niro Electric are about £650/month.
Premium electric cars: Higher-end models, such as the Tesla Model 3 and Polestar 2, range from £1,000 to £1,100/month.
Plug-in hybrids: Options like the Kia Sorento and Volvo XC60 start from £900/month, offering flexibility with both electric and petrol power.
Sports electrics: Performance-focused models, such as the Lotus Eletre and Audi e-tron RS, cost between £1,750 and £2,700/month.
Discounts are often available for longer commitments, making car subscriptions a flexible and hassle-free alternative to traditional car ownership.
Why Choose a Car Subscription? Pros and Cons
With 49% of consumers open to a car subscription for their next vehicle in 2024, it’s clear that this flexible, sustainable model is gaining traction. Let’s explore why.
Benefits of Car Subscriptions
Opting for a car subscription for your employees offers a range of advantages, particularly for businesses seeking flexibility and simplicity in fleet management.
A car subscription consolidates insurance, maintenance, and breakdown cover into one monthly payment, eliminating unexpected bills and simplifying budgeting. This approach means less administration for your team and a hassle-free driving experience for your employees.
Drawbacks of Car Subscriptions
Despite the flexibility, it’s essential to consider potential drawbacks. Car subscriptions can be more expensive month-to-month than traditional leasing or purchasing, which could affect long-term costs.
Additionally, subscription terms vary, especially in mileage limits, so review each provider’s offerings carefully to avoid extra fees. Not all features are included across all subscriptions, so it’s wise to confirm with the provider what’s covered before signing up.
Car Subscription vs. Leasing and Buying
A common question we get asked is, “how does car subscription differ from leasing or buying?”
The main difference lies in flexibility and commitment. Let’s go into more detail:
Types of Car Subscriptions Available
Car subscriptions come in a range of term options, allowing businesses to select the best fit for their needs. Short-term subscriptions typically span from a few weeks to a few months and are ideal for companies needing temporary vehicle solutions, such as project-based assignments or seasonal staff.
Long-term subscriptions, on the other hand, offer the flexibility of a subscription with the stability of a longer commitment—perfect for roles that require a steady vehicle over several months or even years. This flexibility means you can tailor your fleet to changing demands without being locked into the lengthy contracts often associated with leasing or buying.
All-Inclusive Subscription Plans and Customisation
Most car subscription companies offer all-inclusive plans. This setup is designed to remove the hassle of separate expenses and administrative tasks, so you and your employees can focus on what matters. Here’s what an all-inclusive plan generally covers:
Insurance: Comprehensive coverage, keeping your employees and vehicles protected.
Maintenance: Regular servicing, MOTs, and repairs to keep vehicles in top condition.
Breakdown Cover: 24/7 roadside assistance, giving you peace of mind in case of unexpected issues.
Tyre Replacement: Tyre wear and tear are managed as part of the plan.
Flexible Mileage Options: Customised mileage packages to match your business’s specific needs.
Choosing the Best Car Subscription Plan
Car subscription plans are offered by a range of car companies, from car manufacturers to fleet management firms. Here’s how to choose the right one for your needs.
Flexible Terms: Look for companies that offer short-term and adjustable plans to fit your evolving needs.
All-Inclusive Costs: Simplify budgeting with one monthly fee that covers insurance, maintenance, and breakdown services.
Vehicle Variety: Choose a service with a range of cars, including electric and hybrid models, for adaptability.
Mileage Options: Ensure mileage packages align with your team’s usage to avoid extra charge.
Fleet Management: Do you need guidance or management on top of your car subscription? Choose a company that provides this alongside the car subscription service.
Why Choose Mercia Fleet Management?
With our flexible, all-inclusive packages, you get everything covered—insurance, maintenance, and breakdown support—rolled into one predictable monthly cost.
This means no unexpected costs or complicated admin, just straightforward, reliable mobility solutions.
For companies aiming to go green, our electric vehicles offer a practical way to reduce your carbon footprint. By incorporating electric vehicles into your subscription plan, your company can see substantial savings on fuel costs, as EVs run at a fraction of the price of petrol or diesel. You can also expect tax incentives, such as greatly reduced Benefit-in-Kind (BIK) rates.
With Mercia Fleet Management, adopting EVs isn’t just easy; it’s a strategic choice for a more cost-effective and environmentally responsible fleet solution.
About Author
Charlotte Matthews
I work in Marketing, creating our guides, launch materials, and more.
Published on 15th January 2025
Frequently Asked Questions (FAQ's)
We’ve answered some of the most frequently asked questions on car subscription services.
What Happens if I Want to End My Car Subscription Early?
Most car subscription services offer the flexibility to end your plan early, but it’s essential to check the terms before signing up. Some providers may charge a small early termination fee, while others allow you to switch or stop without penalties, depending on the agreement.
Is Car Subscription a Good Idea?
A car subscription can be an excellent choice for businesses looking for convenience, flexibility, and simplicity. Unlike traditional leases, subscriptions offer all-inclusive monthly pricing, covering essentials like insurance, maintenance, and breakdown assistance, saving you from unexpected expenses. For companies that require temporary or varied vehicle options, car subscriptions can be a practical and cost-effective alternative to ownership.
What is the Difference Between Car Rental and Subscription?
While car rentals are typically short-term and best for immediate, brief needs, car subscriptions provide a medium to long-term solution with the added benefit of predictable monthly costs.
What is Auto Subscription?
Auto subscription is a flexible vehicle service that allows businesses or individuals to pay a monthly fee for access to a car, including insurance, maintenance, and breakdown cover. It’s designed for ease and convenience, offering the opportunity to switch vehicles or end the plan when needed.
What is Personal Contract Purchase?
Personal Contract Purchase (PCP) is a financing option where you make monthly payments to use a car over a fixed term, typically 2-4 years, with the option to buy the vehicle at the end. In PCP, you pay a deposit and monthly payments, then choose to buy, return, or trade in the car.
How is this different from a car subscription? Unlike PCP, car subscriptions let you change or cancel the service as needed, making them ideal for businesses seeking convenience without the obligations of ownership.