Car subscription, a rising trend in the automotive landscape, offers a unique alternative to traditional ownership or leasing. The allure of flexible mobility is steering more individuals towards car subscription services. In 2021, a survey by Volkswagen Financial Services UK revealed that 61% of individuals aged 18 to 34 prefer car access via subscription over owning a car outright. Despite this growing demand, car subscriptions remain relatively unfamiliar to many Britons, with 49% unaware of this service, according to a YouGov survey.
In this article, we dissect the concept of subscribing to a car, shedding light on how it differs from conventional ownership and leasing, focusing on Pivotal – Jaguar and Land Rover’s subscription service. We aim to answer the burning question: Is car subscription worth it?
Understanding Car Subscription: What Sets It Apart?
Car subscription is an all-inclusive service where subscribers gain access to a diverse vehicle fleet through a monthly fee. Unlike ownership and leasing, car subscriptions offer added perks and unparalleled flexibility.
Pivotal, the subscription service from Jaguar and Land Rover, exemplifies this model. Pivotal provides members with a fleet of luxury vehicles under a comprehensive monthly payment, covering insurance, maintenance, repairs, roadside assistance, vehicle delivery and collection, and access to a dedicated member services team.
Learn more about Pivotal here.
Comparing Costs: Car Subscription vs. Buying Outright
Comparing the cost of a car subscription to buying a vehicle outright is complex, as a subscription encompasses additional expenses like insurance, tax, servicing, and certain wearables. However, the value of a subscription extends beyond financial considerations, offering all-inclusive payments, freedom from depreciation, access to the latest models and technology, and the flexibility to pause and resume payments.
The All-Inclusive Advantage: Convenience and Cost Savings
Car subscription consolidates all vehicle expenses into a single, convenient payment. Pivotal’s offering, for example, includes insurance for two drivers, road tax, servicing, roadside assistance, home delivery and collection of the car, and the option to update to a fresh vehicle every six months.
While ownership may be more cost-effective for those content with managing multiple payments and retaining the same vehicle long term, subscription excels where flexibility and ease of management take precedence.
Escape Depreciation: A Unique Subscription Benefit
Vehicle depreciation, a typical concern for owners, is bypassed by subscribers. Traditional depreciation rates of 15-35% in the first year and up to 50% over three years may be exacerbated by the UK’s 2030 and 2035 targets, influencing the resale values of petrol and diesel cars. Flexible subscriptions allow users to swap cars effortlessly when regulations change, avoiding potential restrictions or added charges.
Embrace Variety: Drive the Latest Models and Technology
Car subscriptions respond to the modern desire for access to diverse products and services. Unlike ownership or long leases, subscriptions provide access to various new or approved-used vehicles. Whether you prefer premium cars, need a 4×4 for winter, or want to explore electric driving without commitment, a subscription offers unparalleled flexibility. Over a 2-year period, Pivotal members can experience at least four different cars, each under 12 months old and maintained in top condition.
Pause and Resume: Adapting to Changing Priorities
In a world marked by unexpected events, flexibility has become paramount. Car subscriptions, with their pause and resume feature, align with this need. If priorities change, subscribers can pause their subscription without incurring additional charges. This model not only caters to sporadic vehicle use but also contributes to a more circular economy, reducing vehicle over-production.
Learn more about car subscription sustainability on the Pivotal blog here.
Business Advantages: Cost Savings and Adaptability
Businesses stand to gain significant cost savings through a car subscription. The ability to free up assets swiftly in response to risk and changing circumstances enhances business resilience. Salary sacrifice schemes further amplify savings, as employers benefit from reduced National Insurance payments on the portion of salary allocated to the subscription.
The streamlined, all-inclusive nature of vehicle subscriptions also saves businesses valuable time that would otherwise be spent managing multiple payments for each company vehicle.
Subscription vs. Leasing: Unveiling the Differences
While the fundamental principle of subscription aligns with leasing – monthly payments for vehicle use – subscription offers added advantages. Subscribers access a fleet of different vehicles and can pause and resume their subscription as needed. Although there may be a marginal cost difference, subscription tends to be comparable to personal contract purchase (PCP), a popular car financing method.
A comparison of the monthly cost of subscribing to a Jaguar I-PACE with Pivotal against various PCP structures for the same vehicle reveals that subscribing offers a highly competitive monthly price, coupled with the added benefits of the subscription model.
Is Car Subscription Worth It? The Ultimate Question
In a world increasingly embracing subscription models, from streaming services to music platforms, car subscription may not be the perfect fit for everyone at all times. Similar to how some prefer owning movies and music rather than subscribing, car subscription’s worth depends on individual lifestyle, priorities, and short-term vehicle requirements.
For those prioritising flexibility, choice, and convenience, a car subscription proves invaluable. Businesses, especially, appreciate the freedom to release assets quickly during uncertain times. Whether you’re a dynamic family with ever-changing needs or an enthusiast who relishes
Contact our Pivotal experts today to explore if car subscription is the right choice for you.