Are Car Subscription Services Worth It? Here’s How to Decide
The rise of Uber and Lyft was just the start of the rideshare revolution.
With the ever-growing popularity of smartphone apps and subscription services, tech innovators and automakers alike have developed a range of successful car subscription services that challenge the conventional ways of owning a car.
- What car subscription services entail
- How much car subscriptions cost
- The pros and cons of car subscription services
- Whether a car subscription service can save you money
- The major services in the market going into 2023, ranked
Typically, when you want a new set of wheels, you have a few options:
- You can finance a new, certified pre-owned or used vehicle.
- You can pay cash without the trouble of a loan when purchasing a new, certified pre-owned or used vehicle.
- You can lease (think long-term rental) from a dealership for a set number of years with mileage and other restrictions.
Alternatively, if you live in a mostly walkable city or are traveling somewhere by plane, you might only drive when renting a car through a traditional rental company like Enterprise or Hertz.
Car subscription services fit somewhere in between leasing and short-term car rentals.
When you sign up for a car subscription service, you pay a monthly subscription fee for access to vehicles, whether that’s on an as-needed basis or with a particular vehicle for a certain amount of time. This can be particularly useful if you drive a fuel-efficient sedan for your daily commute but need a truck for weekend renovations on your house or want to treat yourself for a week in a sports car.
Though subscription services vary, the fee is typically all-inclusive. That means the service will cover car insurance, roadside assistance and routine maintenance, like oil changes and tire rotations.
Automakers like Porsche, Volvo and Nissan have gotten into the car subscription game, as have major car rental companies like Enterprise and Sixt. You can also subscribe to brand-agnostic companies like Drive Flow, YoYo and FreshCar and, in California, get a car subscription through AAA. Third-party service Borrow, which provides electric vehicles in Southern California, is currently expanding its program.
Car subscription services are typically only available in major cities. Before deciding to participate in a program, make sure your location is eligible.
Note: Several automakers, rental agencies and tech startups previously offered car subscription services, but since the pandemic, many have ended their programs or been acquired by competitors.
Prices for car subscription services can vary greatly.* Luxury automakers that have gotten into the subscription game can charge four-figure monthly fees for access to their cars — and their target buyers are happy to pay them.
But that doesn’t mean all car subscription services are expensive. Some automakers, like Nissan, have instead focused on cheaper subscription services for used vehicles. And other non-automaker-affiliated startups have created their own models that work in various cities.
These car subscription services have some variations in how you pay. Some charge you by the vehicle type, others by the mile; and some charge an activation fee, others a reservation fee.
Here are some of the prices across the market:
- Nissan Switch: $699 to $899 per month, plus $495 activation fee
- Porsche Drive: $1,700 to $3,200 per month, plus $595 activation fee (waived for 3-month subscriptions)
- Care by Volvo: $600 to $875, plus $500 activation fee
- Sixt+: $649 a month for a Nissan Sentra or similar (sedan) to $1,269 a month for a Chevrolet Suburban or similar (SUV), plus a $199 sign-up fee
- Subscribe with Enterprise: $1,499, plus a $250 enrollment fee
- Drive Flow: $999 to $1,699 per month
- YoYo: $99 joining fee plus $0.50 to $1 per mile
- FreshCar: $499 to $599 month (mileage plans, $0.40 per mile for overages)
*All prices included in this article were accurate as of March 6, 2023. Pricing frequently changes in the market, so please confirm all pricing on each company’s website.
Car subscription services can seem expensive at first glance — and in most cases, they still are — but they can also save you money (and hassle) in other ways.
Pros of Car Subscription Services
Here’s why a car subscription model might make sense for your lifestyle:
- Bundled price: You’d like to have all your vehicle fees wrapped into one price rather than worry about vehicle registration, monthly insurance premiums and routine maintenance. This makes budgeting way easier — no stressing about unexpected or variable costs.
- Maintenance freedom: You enjoy not worrying about scheduling and/or performing maintenance like oil changes, tire rotations and more complex repair work. In addition, many services offer free roadside assistance, so no need to subscribe to AAA or a comparable program.
- Flexibility: Many car subscription services allow you to change up your vehicles on a routine basis. If you want to switch what you’re driving, it’s much easier to do so than it is when you’ve purchased or even leased a car. Subscription services also have flexible terms, with many built on a month-to-month, pay-as-you-go model.
- Bad credit: If you have a poor credit score or are worried about amassing more debt, a car subscription service could make it easier to get behind the wheel. A caveat: If you’re struggling with debt and cannot get a vehicle loan, do not use a credit card to fund your car subscription fees.
- Convenience: Most services are app-based, meaning you can do everything from your smartphone. A concierge will typically even drop the car off to you.
- Savings: If you’re struggling to come up with a down payment for a new vehicle and face high insurance costs because of your demographic or location, a car subscription might be a way to save if you opt for a lower-tier vehicle.
Cons of Car Subscription Services
But there are also drawbacks to subscribing to such a service:
- Monthly payments: When you buy a car, there’s an end in sight — that financial freedom on the horizon when you’ve paid the car off in full. If you choose to subscribe, you will forever be paying for a vehicle.
- Limitations: Companies may cap your mileage, ban smoking in vehicles and even force you to leave your four-legged companions at home.
- Lack of negotiation: When buying a new or used vehicle, you can haggle all you want with the dealer or private seller. But when it comes to subscription service, vehicle prices are set in stone.
- Volatility: Over the last few years, car subscription services have come and gone. As companies continue to figure out what works, some may succeed and others will inevitably fail. If you choose a company that goes out of business, you’ll have to navigate a new solution quickly.
- Availability: Companies are still testing the waters with car subscription services. That means, in most cases, programs are only available in a handful of major cities. If you don’t live in a city where a program is offered, you won’t be able to participate. And if you join a program but have to move to a location where it’s not offered, you’ll have to drop out — and there may be fees involved.
So can going with a car subscription service actually save you money? In most cases, probably not. But if you choose the more frugal options and think of driving as a necessity, not a luxury, you can make it happen.
To demonstrate, let’s imagine a scenario with Sixt+.
As stated above, you can get a Nissan Sentra for $649 a month at 1,000 miles a month. You’ll want to opt in to the basic protection package at the very least ($99.99 a month). There’s also a sign-up fee of $199.
Driving that Nissan Sentra over three years with a car subscription service like Sixt+ would ultimately cost you $27,162.64 plus tax.
So what if you were to buy a Nissan Sentra from the dealership? Let’s assume a down payment the same size as the initial fees for Sixt+, and let’s assume you purchase the base model of the current Nissan Sentra, which costs $19,950. Using the Cars.com loan calculator, an estimated sales tax of 7.80%and an interest rate of 8.50% based on Cars.com’s estimate for a good credit score, the monthly payment over 36 months is $673 — or $24,212 plus $199 down payment, over the life of the loan.
But let’s not forget the cost of vehicle registration (it varies by state, but we’ll call it $50 a year), the cost of insurance (an average of $1,601 a year, according to Forbes) and the average annual cost of routine maintenance (about $800 a year, according to AAA).
So if you finance a Nissan Sentra over three years, it would cost you $31,764. That’s $7,353 more than you would pay if you used Sixt+ for the same car over the same amount of time.Of course, after the car is paid off, you have the option to sell it privately or to a dealership. Depending on how well you’ve taken care of the vehicle, you could get much more than $7,353 for it.
But by using Sixt+, you will have avoided the annual hassle of vehicle registration, the process of getting car insurance quotes and determining what coverage you need, and the uncomfortable process of haggling with a dealership at purchase and then again when trading it back in. Plus, all the maintenance is covered, so if something major malfunctions in the vehicle, you are not on the hook as you would be in a vehicle you purchased yourself.
In general, independent (i.e., not automaker-affiliated) startups tend to offer better pricing for their subscription services. However, automaker-agnostic services have come and gone frequently over the last several years. The graveyard of car subscription services that have either folded or been acquired by another company includes Mobiliti, Flexdrive, Carpe, Canvas, Inride, Carma and Less.
On the other hand, automakers have a lot more financial power behind them than the indies do. Though Cadillac and Ford have both stepped out of the car subscription game, some other auto giants have held steady.
Starting a subscription with a third-party service may net you some savings up front, but be prepared for that company to potentially fold or be acquired, which may affect your subscription.
As such, we’ve ranked car subscription services separately: one ranking of third-party services and one ranking of automaker services.
The Best Third-Party Car Subscription Services
YoYo offers an unconventional car subscription model in an already unconventional industry, but it’s one that can work for a lot of city dwellers who just need a car on occasion. Signing up takes mere minutes, the sign-up fee is affordable ($99), and then you just pay per mile. Cars are dropped off wherever you are, you can swap vehicles as often as you want, and you don’t even have to worry about fuel costs.
2. Drive Flow
We like Drive Flow because of its tiers. Choose the mileage amount and number of vehicles that make sense for you, and pay one flat rate every month. If you only need access to a car now and then, you can even opt for the Explorer tier (limited to 80 miles a day) for significant savings.
Sixt+ starts to get in the territory where it may not be financially wise to invest, but as the example above demonstrates, if you are frugal and intentional, you can potentially save money over time by using the Sixt+ car subscription service.
Honorable Mentions: FreshCar and Subscribe with Enterprise. We also like EV-only Borrow, but the program is limited (and currently unavailable while they revamp to expand).
The Best Automaker Car Subscription Services
A caveat: Most of these options do not make financial sense to true Penny Hoarders. If you are looking for a way to treat yourself, however, and money is not of concern, here are some of the best car subscription models straight from automakers:
1. Nissan Switch
One of the major non-luxury automakers to get into (and remain in) the car subscription game is Nissan with the Nissan Switch program. You’ll pay a $495 activation fee and then select between the $699 per month (Altima, Rogue, Pathfinder and Frontier) or $899 per month (Altima, Rogue, Pathfinder, Frontier, LEAF, Maxima, Murano, Armada, TITAN and 370Z) pricing models. The plans include roadside assistance, car washes and details, maintenance, insurance, a concierge — the works.
2. Care by Volvo
Volvo’s all-inclusive car subscription service, called Care by Volvo, is all-inclusive and model-based, so there’s no switching up models as you go. Prices vary, but availability is currently very limited, so you’ll have to visit a Volvo retailer to talk details.
3. Porsche Drive
Porsche Drive (previously known as Porsche Passport) is certainly not a Penny Hoarder way of driving, but if you’ve dreamed of trying out a range of the brand’s high-performance models and can manage the $595 activation fee and monthly fees ranging from $1,700 to $3,200, well, knock yourself out.
Contributor Timothy Moore is a personal finance writer and editor. Find his work on Forbes, USA Today, Chime, SoFi and Insider. He’s also the managing editor for a print magazine.