It’s safe to say that every aspect of life is pretty expensive these days. There’s been a seemingly endless rise in the cost of living, and it’s showing few signs of improving anytime soon. One area of living expenses that has seen an eye-watering cost increase recently, particularly in the UK, is driving. Some of the price hikes, particularly when it comes to fuel and actual vehicle costs, have been absolutely staggering. With all of the increases that have remained consistently high, it’s easy to see why so many drivers are desperately hunting for ways to reduce their motoring-related outgoings.
The truth is, owning a car today can be incredibly expensive
Between astronomical fuel price hikes, the ever-increasing cost of insurance, and the severe rise in vehicle values (particularly in recent years due to supply and demand problems), it’s hard to find an aspect of driving that hasn’t become harder on our bank balances. But there’s a way to save some serious money when it comes to getting out on the road…
A smarter way to drive
With the realisation that car ownership is becoming less of a luxury and more of a financial burden for some drivers, many motorists have been looking for alternative ways to get in the driving seat whilst avoiding unnecessary expense. Because whilst ownership offers a unique range of benefits to many drivers, to some it simply isn’t a viable option in the current economic climate.
Many motorists in this current day and age have changed their priorities when it comes to driving and vehicle acquisition. For example, many drivers only need a car over limited periods of the year, meaning they’re left paying out for vehicles for the remaining months when they simply don’t need them. Others are looking for a less complex way of handling the financial side of driving – car ownership involves lots of different regular payments, as well as ensuring there’s an available pot for things such as unexpected repairs and other unforeseen costs.
There are countless reasons as to why many people are looking for an alternative way to drive without having to commit to total ownership. But there’s a common solution that drivers are finding that solves their problem, and that solution is flexible short-term car leasing and car subscriptions.
To see the specific ways in which a short-term lease or car subscription can save you money, it’s important to understand the specific situation of any particular driver, as well as what these types of car acquisition actually are.
What is a short-term car lease?
Short-term car leasing works in a similar way to regular leasing. You pay a pre-determined lease cost for a vehicle over a set period of time, with the price being based on your choice of vehicle, the duration of your lease, your required annual mileage, and a few other indicators (usually varying based on the lease provider). Both types of leasing typically end the same way – once your contract is up, you will usually return the car to the provider and either choose a new vehicle to lease or finish your contract completely. Where a short-term lease differs is when it comes to freedom and flexibility. Short-term car leases vary in their terms from 28 days up to 12 months, meaning you’re able to lease a car for a much shorter period of time. This gives drivers significantly more flexibility and freedom without any long-term commitments.
What is a car subscription?
Car subscriptions are quite possibly one of the most straightforward ways to get behind the wheel of the car you want. They work in a way much like other types of subscription – you pay a recurring fee, typically every 28 days or every month, and in return you have access to a vehicle of your choice and a wealth of additional extras. These types of car subscriptions are separate to those manufacturer-specific types of subscriptions that are designed for accessing certain vehicle features – instead, they’re a complete package that gives you everything you need to drive in one convenient package. They work in a similar way to a short-term lease on a rolling contract, giving you exceptional flexibility thanks to being able to cancel or pause your subscription when you need to.
How short-term car leases and car subscriptions are saving people money
In a world where budgeting and planning a more cost-effective way of living is becoming more and more complex, finding opportunities to save some serious money are a huge priority for countless individuals and families everywhere. Car subscriptions and short-term leases both offer such opportunities, and here’s why:
- You don’t have to deal with long-term commitments
One of the biggest drawbacks of vehicle ownership and long-term lease and finance deals is the extensive financial commitment. Ownership and traditional methods of vehicle acquisition typically involve either a long contract (usually a minimum of 12 months or more for a lease or finance deal), or long-term ownership of a vehicle if bought outright. Short-term leases and car subscriptions don’t have this problem. Contracts usually start at 28 days, and often allow you to cancel at any time (usually with a set notice period). This makes them invaluable for individuals who may not need a car 100% of the time, freeing up money that would otherwise be spent on a vehicle that the driver doesn’t need at a particular time.
- There’s no depreciation or unreleased equity to worry about
There’s always a worry with buying a car that you’re simply going to lose a significant portion of the cash you’ve paid for the privilege of actually owning it when the time comes to part ways. Depreciation on a vehicle you own can leave a bit of a sour taste in your mouth when it comes to selling or part-exchanging for something else, particularly if you just so happen to have chosen a vehicle that hasn’t held a strong value compared to other models. Short-term leases and car subscriptions do away with that. You never have to worry about selling your car when you want to upgrade or dealing with less-than-ideal valuations for part exchanges. These types of contract let you switch to the latest models in a heartbeat, giving you the freedom to choose the car you want without hassle.
- With a car subscription, your credit rating isn’t typically a concern
This one is more about car subscriptions rather than leasing. Leases will, in most cases, require relevant credit checks and loan requirements, thus impacting your credit score. Even if you’re approved, this can sometimes mean that future finance decisions can still be affected in a negative way as the level of debt you owe on your credit file can have repercussions when other lenders are making a decision on your eligibility. In most cases, car subscriptions don’t carry the same concern. They’re generally not considered a loan, particularly where short-term rolling contracts are concerned, meaning there won’t be a further level of debt showing on your file. Not only does this mean that your total visible debts will be lower, but it also means that any future finance applications you do go ahead with stand a higher chance of being approved, and/or being available at lower interest rates.
Ready to see how much you can save?
There’s never been a better time to discover the benefits of a car subscription or short-term lease. With the ever-increasing cost of living coupled with the increased demand for flexibility and a multitude of looming changes for drivers in the coming years, it’s time to think about a savvier way to get out on the road