The debate around car subscription versus ownership has often centered on one main question: which is more cost-effective? Many motorists assume that car subscription is a premium service, accessible only to those willing to pay for flexibility and convenience. But is this really the case? A new report from the Australian Automobile Association (AAA) sheds some light on the true cost of car ownership, revealing that it’s not as affordable as many believe.
When comparing car ownership to car subscription, it’s crucial to consider more than just the upfront price tag. The AAA report goes beyond the obvious costs, like fuel, to include the many hidden expenses associated with car ownership. These include car loan payments, insurance, maintenance, and registration—costs that are often overlooked, but which add up quickly. By contrast, these expenses are rolled into the single, transparent weekly payment that comes with a car subscription.
The numbers tell an interesting story. According to the AAA, the average Australian spends $458.82 per week on transport. Shockingly, 46% of that figure—nearly half—is tied up in car loan payments. On the other hand, the median weekly cost of a car subscription on the Loopit network is $269. Even when you factor in additional costs not typically covered in a subscription, such as fuel and tolls, the total rises to just $402.58 per week.
This makes for an interesting comparison: while the average Australian is spending $458.82 per week on car ownership, those opting for a car subscription through Loopit spend just $402.58. That’s a saving of $56.24 per week, or nearly $3,000 per year. And these savings don’t just represent dollars. They also reflect the time and hassle saved by not having to deal with ongoing maintenance, insurance renewals, and unexpected repair bills. This means that for motorists looking to reduce their financial and administrative burden, car subscription offers a compelling alternative.
So why do many people still believe that subscription is more expensive than ownership? It’s because car ownership comes with a kind of psychological blind spot. We underestimate the cumulative costs associated with maintaining a vehicle over time. A new car may seem like a one-time expense, but the reality is far from it. Insurance renewals, servicing, tire replacements, and registration fees add up year after year.
On the other hand, subscription simplifies this. With one predictable payment, drivers can avoid the unexpected costs that inevitably come with car ownership. And beyond financial benefits, there’s a convenience factor at play too. A subscription model allows flexibility that ownership simply cannot. Whether you need a different type of car for the summer or a new model every couple of years, car subscription offers a level of adaptability that meets the evolving needs of today’s motorists.
For the wider automotive industry, it’s time to challenge the outdated notion that car ownership is still the optimal choice for consumers. We live in an era where flexibility and convenience are paramount, and for many drivers, subscription models are beginning to outshine traditional ownership both in terms of cost and convenience.
For those working in the automotive industry, the question is no longer whether subscription is expensive, but whether ownership is truly worth the hidden costs. As the data shows, the financial and practical benefits of subscription are clear—and it’s time for the broader market to recognize them.
*Loopit's network of providers includes several luxury brands, which can skew the average. For this reason, we've chosen to highlight the median weekly cost as a more accurate reflection of typical subscription pricing.
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