Car ownership vs. carsharing vs. car subscription

The right option for you could depend on how often you drive and where you live.

Last updated:

Having access to a car is a necessity for most people, but the rise of carsharing and car subscription services means you now have alternatives to traditional car ownership. But if you drive often, you may be better off sticking with a car loan.

Auto Arriba Car Loan

  • Min. Loan Amount: $3,500
  • Max. Loan Amount: $50,000
  • Interest Rate: 8.99% to 29.50%
  • Loan Term: 1-7 years
  • Quick funding
  • All provinces (excluding Quebec)

Auto Arriba Car Loan

Auto Arriba offers car loans starting at $3,500 up to $50,000, with as little as a 30 minute loan turnaround time.

  • Min. Loan Amount: $3,500
  • Max. Loan Amount: $50,000
  • Interest Rate: 8.99% to 29.50%
  • Loan Term: 1-7 years
Promoted

How do they work?

Though all options give you access to a car to drive, they each work a bit differently.

  • Car ownership

    Car ownership involves purchasing a vehicle outright, either by using your own cash or by getting a car loan. The car is considered your personal asset, and you’re free to use it as you wish. You can also sell the car at any time, as long as you’ve paid off your loan. If you go this route, it’s helpful to figure out how much you can should spend on your vehicle considering both cash and loan options.

  • Carsharing

    Carsharing is a form of car rental that lets customers use a vehicle on a short-term basis, whether that’s for a couple of hours, days or weeks. The cars are either owned by companies, like Zipcar, or by individual owners who rent out their vehicles when they don’t need them.

  • Car subscription

    A car subscription service, like Care by Volvo, is similar to carsharing, but gives you ongoing access to a vehicle in return for a regular payment. You can generally choose from a range of brands and vehicle types, and may be able to switch vehicles as you wish. Most car subscription services have no fixed contracts, and you can cancel your subscription when you want.

    You will generally make a single weekly or monthly payment, which covers all registration, insurance and maintenance.

What are the benefits and drawbacks?

Weigh the pros and cons of each option before deciding which is right for you.

Car ownership

  • Ongoing access to vehicle. As the owner, you have complete use of the car whenever you need it.
  • Greater choice of vehicle. You can choose whatever vehicle you want that suits your needs and aren’t limited to the selection of vehicles available on a sharing or subscription service.
  • The car is your asset. You can sell the car whenever you wish and use the funds for something else.
  • Depreciating value. Cars are generally a depreciating asset and lose value over time. If you plan on selling your car, you’ll likely get less than what you originally paid for it.
  • Limited to one type of vehicle. Unless you also purchase another car or use a carsharing or subscription service as well, you’ll be limited to just the one type of vehicle you choose to buy.
  • Repair and maintenance costs. As the owner of the car, you’re responsible for all ongoing repairs, which can be expensive. You also need to cover the costs of registration and insurance.
  • Cost of finance. If you need to get a car loan to purchase the vehicle, you’ll also need to cover the cost of repaying the loan.

Carsharing

  • Only pay for a car when you need it. You have the flexibility to choose when and for how long you rent the car.
  • Range of vehicles to choose from. Most carsharing services have a range of vehicles available, meaning you can choose different vehicles for different occasions.
  • Not responsible for repairs and maintenance. You don’t need to pay for repairs or servicing.
  • Choice of vehicles may be limited. You may find the type of vehicle you want isn’t available when you need it.
  • Vehicle pickup. You generally need to pick up and drop off the vehicle from a designated area, which may be inconvenient or prohibitive depending on your location.
  • Availability depends on where you live. Car sharing programs are popular in urban areas where there are many convenient pick-up and drop-off locations. But if you live in a more rural area or even a more rural suburban area, this option may not be available.

Car subscription

  • Ongoing access to a vehicle as long as you need it. Unlike carsharing, you have exclusive access to a vehicle for as long as you remain subscribed.
  • Ability to change vehicles as you need. Some subscription services let you swap your vehicle when you want.
  • No ongoing obligation. You’re generally able to cancel your subscription at any time, or at the end of the current billing period.
  • Can be expensive. The weekly or monthly subscription fee can often be quite high, and you don’t have the benefit of owning the car as an asset.
  • Vehicle choice may be limited. Like carsharing, the range of vehicles you can choose from will be smaller than if you were to buy a car.

What costs do I need to be aware of?

It’s hard to calculate the exact cost of each option, as it’s determined by factors such as the type and age of car, how much you use it and how long you need it for. However, there are a few general costs to keep in mind when considering each of the options outlined above.

Car ownership

  • Purchase price of the vehicle. This is the biggest single cost of car ownership and can be covered by either your own savings, a car loan or a combination of the two.
  • Repairs and maintenance. You’re responsible for paying for all necessary repairs and servicing the car needs.
  • Registration and insurance. You need to have the car registered and meet your province’s minimum insurance requirements to drive.
  • Fuel. You need to cover the cost of gas.
  • Cost of financing. If you use a car loan to purchase your vehicle, you’ll need to make monthly payments.

Considering whether to buy or lease a car? Compare them now

Carsharing

  • Security deposit. You’re generally charged a security deposit that’s refunded if you return the car in good working condition.
  • Rental cost. Your payment covers the lease of the car and varies depending on the type of vehicle you rent.
  • Fees. You may be charged fees for driving long distances, getting the car dirty, returning it without a full tank of gas and a host of other reasons.
  • Fuel. You generally have to cover the cost of gas and need to refill the tank before returning the vehicle.

Car subscription

  • Rental cost. Your subscription fee covers the cost of renting the vehicle and varies based on brand and class.
  • Fees. As with carsharing, you could be charged fees if you return the vehicle in less-than-perfect condition.
  • Fuel. You also have to cover the cost of gas.
  • Security deposit. You may need to pay an initial deposit that’s returned once you cancel your subscription, provided you haven’t damaged the vehicle.

Try to calculate the specific costs of each car model you’re considering to find the one that makes the most sense for your financial situation. If you’re considering carsharing or car subscription, you can contact the provider directly to see the costs.

Which one is right for me?

Which option is best for you depends on your personal and financial situation.

Car ownership

Buying a car may be your best option if …

  • You need long-term access to a car on a regular basis.
  • You occasionally need immediate access to a car and can’t wait for one to be available.

Carsharing

Using a carsharing service may be best if …

  • You need occasional access to a car, such as for weekends or trips away.
  • You only need access to a car for a couple of weeks.
  • You need different vehicles for specific purposes, such as using an SUV when picking up friends or a small car to save on gas for daily commutes.

Car subscription

Consider using a car subscription service if …

  • You need ongoing access to a car, but only for a short period.
  • You want the flexibility of changing vehicles and not being locked into a long-term car loan
  • You need different vehicles for specific purposes, such as using an SUV when picking up friends or a small car to save on gas for daily commutes.

Compare your car loan options

Name Product Min. Loan Amount Interest Rate Fees Loan Term Min. Credit Score
Auto Arriba Car Loan
$3,500
8.99% to 29.50%
Contract fee of $499.00
1-7 years
N/A
Auto Arriba offers car loans starting at $3,500 up to $50,000, with as little as a 30 minute loan turnaround time.
Fairstone Personal Loan (Unsecured)
$500
26.99% - 39.99%. Varies by loan type and province
None
6 months - 5 years
N/A
Fairstone offers unsecured personal loans up to $20,000
LendingMate Personal Loan
$2,000
43% (British Columbia and Ontario) and 34.9% (Quebec)
None
1-5 years
N/A
LendingMate offers loans to Canadians with poor credit with no credit checks. Guarantor required for application.
Ferratum Personal Loan
$2,000
18.9% - 54.9%
None
1- 5 years
N/A
Ferratum provides Canadians in need of quick cash with loans for car purchases from $2,000 to $10,000 for 1 year to 5 years.
LoanConnect Car Loan
$500
4.6% to 46.96%
Varies by lender, loan type and province
1-5 years
420
Get access to 25+ lenders through Loan Connect's brokerage, and receive pre-approval in as fast as 5 minutes, and financing up to $50,000 in as little as 24 hours from the time of your application.

Compare up to 4 providers

Bottom line

Carsharing and car subscription services can offer savings and flexibility for people who only need access to a car occasionally or who want the variety of driving different vehicles. But if you use a car daily, you’ll likely be better off getting a car loan and purchasing a car of your own.

Frequently asked questions

Was this content helpful to you? No  Yes

Ask an Expert

You must be logged in to post a comment.

Go to site