Car Subscription Services Can't Work For The Masses, And Here's Why

Car access subscriptions are said to be the future. Monthly payment plans will allow you to take this car for a few days, then that car for a few days, then another car for a few. It sounds great: as with Polestar’s scheme, the cars are delivered to you fully-fuelled (or charged) and detailed, totally ready to go.

For the average Joe, this is having your automotive cake and eating it. Insurance, tax and any other documentation is all taken care of for you. You can achieve peak laziness. You simply pick the car you want, it turns up and you drive it for as long as you want or need it.

It’s not that simple, though. The cost of this luxury is insane. BMW has confirmed an entry-level price of $2000 (£1419) per month for its Nashville test run. You don’t even get access to the bigger, faster M-cars for that; only the M2. It’s at least four times the price of directly financing one of the cars you’d have access to, but it does include all the ancillary spend associated with running a car. Porsche’s also starts at $2000 per month, but at least you get more interesting metal.

I thought I’d do some maths to figure out how much cheaper a car subscription would realistically have to get for it to have mass appeal. Bear with me on this; I know buying new isn’t for everyone but the comparison has to be fair.

Let’s start with a car. A brilliant all-rounder; mid-sized with a big boot, loads of passenger space, enough performance and plenty of kit. The Skoda Octavia vRS Estate seems like a fair example, not that I’m biased or anything. This, for the sake of this argument, is a car that would do everything you could need it to for the duration of a finance term.

Typically, the Skoda finance calculator was ‘down for maintenance’ when I wrote this piece, but lease deals have appeared lately for around the £280 per month mark with a reasonable 12,000-mile annual allowance. Let’s use that as a guide and use an annual figure of £3360 for the car alone.

The easiest thing for getting insurance quotes is to use my own details: male, 32 years old, married, homeowner, journalist and photographer, living in sunny Wales. The best I could find from a quick search was £388, which is only about £80 more than it costs to insure my own, 12-year-old vRS.

Then there’s road tax, rated at £140 per year. Let’s say you’ll need two sets of front tyres and one set of rears over a three-year agreement. Priced at £150 each for Continentals and Michelins or a friendlier £110 per corner for Yokohamas, that’s an average of at least £220 per year on rubber.

Servicing is another expense to consider. At a main dealer your three-year term would span two minor services and a major, at a total cost of £597; £199 on average per year.

Fuel is the great unknown in this. As part of the subscription deal do you have to return the car fully-fuelled, or do you essentially get the delivery tank included? If it’s the latter, there’s a big comparative extra charge to add to the cost of buying or leasing a car. We don’t know for sure, though, so we have to leave fuel out of it.

The bottom line is this: leasing and running our fictional Octavia vRS estate for three years would cost £4307 per year, excluding fuel. That’s just under £359 per month, all-in. That’s more than £1000 a month cheaper than the BMW pilot scheme, less than a third of the price, and still puts an indefatigable all-rounder on your drive.

The ability to swap cars willy-nilly is definitely worth something and the current players are appealing solely to the rich right now, but the subscription model is going to need to drop below the £450/$635 per month mark for access to a wide range of genuinely good cars. Otherwise, it will never make sense for a mass audience. Can car makers really make it that ‘cheap’? I’m not sure they can.