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Car ownership vs. carsharing vs. car subscription

The right option for you depends on how often you drive.

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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.

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 savings or 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.

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 or by individual owners who rent out their vehicles when they don’t need them.

Car subscription

A car subscription service 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 the vehicle that suits your needs and aren’t limited to the 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 the type of vehicle you choose to buy.
  • Repair and maintenance costs. As you own 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.

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 state’s minimum insurance requirements to drive.
  • Fuel. You also 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. If you’re considering car ownership, you can use our car loan calculator to help work out the potential cost of your car loan.

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 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

Data indicated here is updated regularly
Name Product Filter Values Minimum credit score APR Loan term Requirements
Carvana
No minimum credit score
3.9% to 27.9%
1 to 6 years
18+ years old, annual income of $4,000+, no active bankruptcies
car.Loan.com Car Loans
300
Varies by network lender
Varies by lender
Must be a US citizen with a current US address and employed full-time or have guaranteed fixed income.
Apply with a simple online application to get paired with a local auto lender. No credit and bad credit accepted.
CarsDirect auto loans
Varies by network lender
Varies by network lender
Must provide proof of income, proof of residence, and proof of insurance.
Save time and effort with this lending service specializing in beginner-friendly or subprime car loan.
Auto Credit Express Car Loans
300
Varies
Varies
Must be employed full-time or have guaranteed fixed income of at least $1,500/month and be a current resident of the US or Canada.
Get connected with an auto lender near you, even if you have bad credit.
Monevo Auto Loans
500
3.99% to 35.99%
3 months to 12 years
Credit score of 500+, legal US resident and ages 18+.
Quickly compare multiple online lenders with competitive rates depending on your credit.
LightStream Auto Loans
Good to excellent credit
Competitive
2 to 7 years
Good or excellent credit, enough income or assets to afford a new loan, US citizen or permanent resident, 18+ years old
Quick car loans from $5,000 to $100,000 with competitive rates for borrowers with strong credit.
LendingTree
Good to excellent credit
Starting at 3.09%
Varies by lender
18+ years old, good to excellent credit, US citizen
Compare multiple financing options for auto refinance, new car purchase, used car purchase and lease buy out.
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Compare up to 4 providers

Test drive a car near you

Get connected with dealerships in your area that offer upfront pricing.

Bottom line

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

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