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How car subscription services work

Get ongoing use of a car without all the costs of ownership.

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This contemporary version of a car lease lets you drive away with a fully insured and serviced car for as little as one month to several years. Plus, you often get to switch out your car to meet your weekend whims. However, consider car insurance add-ons since your subscription might not offer coverage like medical payments or higher liability.

How do car subscriptions work?

Instead of buying or leasing, a car subscription lets you pay a flat fee to use a car on an ongoing basis. This new service puts together the best of both the renting and leasing worlds. You get a ride for a longer period but with helpful benefits included.

There are several car subscription startups in the US, including manufacturers and third party services. Car subscription services have a wide range of commitment periods, some charging by the week, month or year. Most allow you to switch your vehicle for a specific number of swaps. You may also cancel your subscription at any time after meeting the minimum requirements.

That means if you go on a week-long road trip with rough tracks and terrain, you might swap your sedan for an SUV. This may suit drivers who fear missing out on features different cars have to offer.

What’s included with a subscription car service?

You’ll pay somewhere between $300 to $600 per month for cheaper services or up to $2,000 for high-end cars. That fee may cover the rental, registration, insurance and maintenance. You’ll cover the cost of fuel and additional mileage or maintenance fees, depending on the service.

  • Car insurance. Most companies include coverage with your monthly fee, which lowers your overall cost of service. The only exception is the company Fair, which tacks insurance on its low subscription rates as an extra fee.
  • Maintenance. No worries about paying to service your car’s engine — that’s covered under your subscription. Some services also replace typical wear-and-tear items like windshield wipers and brake pads.
  • Roadside assistance. Want to ride for miles in uncharted territory? Drive free from worry about roadside breakdowns at no extra charge to you.
  • Car swap. Some subscription companies boast the convenience of switching out your ride for the weekend or within the same month. In fact, manufacturers that offer subscriptions often have a concierge drop the car off at your door.

What’s not included?

Subscriptions are known to include more than your standard lease, but you do have some responsibilities. Those include:

  • Cleaning
  • Excessive wear and tear
  • Fuel
  • Traveling outside the US
  • Unlimited mileage

Where can I get a car subscription?

Subscriptions are a trendy, new way of renting cars offered by car manufacturers, rental and third-party companies. A few examples:

Zipcar

Zipcar calls itself a car-sharing service that lets you hire a car by the hour or day. After becoming a member, you’ll receive a Zipcard in the mail that you use to unlock the car. You can then book a car and pick up at a parked location near you. Zipcar is available in major metropolitan cities like Atlanta, Boston, Chicago, Los Angeles and New York City.

Cost: $7 per month or $70 per year for membership. Car rates vary but can be $10 per hour or $80 per day. Mileage costs 45 cents per mile after 180 miles.

Types of cars: Choose from economy or luxury cars of all types like sedans, SUVs and vans.

Mileage and limits: Your rental includes 180 miles per day

What’s included:

  • Gas
  • Maintenance
  • Roadside assistance
  • Insurance on all Zipcars

Hertz My Car

The rental car company Hertz is dipping into subscription car services in Atlanta, Georgia, Austin, Texas and Southwest Florida. Hertz plans to expand to other cities soon.

Cost: $250 enrollment fee, then $1,000 per month for Tier 1 or $1,400 per month for Tier 2

Types of cars: Tier 1 includes small SUVs, trucks and full-size sedans. Tier 2 includes access to all Tier 1 vehicles plus regular SUVs, large trucks and luxury sedans.

Mileage and limits: Both tiers include 2,000 miles per month with a two-month minimum subscription length. Drivers must be 25 years old or older.

What’s included:

  • Maintenance
  • Roadside assistance
  • Up to two car exchanges per month
  • Insurance, including 100/300/50 for liability and loss damage waiver

Other subscription companies

  • Access —BMW
  • Audi Select
  • Care — Volvo includes tire and excess wear-and-tear protection, plus forgives some excess miles.
  • Canvas — Ford
  • Enterprise
  • Flexdrive
  • Fair
  • Porsche Passport

    What’s the difference between car subscriptions and car leases?

    The main differences between a subscription and a lease are the length of your agreement and the benefits included. Characteristics that separate these two services:

    • Application process. A lease involves more paperwork and approval, while you can get a car subscription with a quick, easy online application. That may make it easier for drivers with low credit to get approved.
    • Benefits. This trendy service often includes insurance and roadside assistance, which is coverage you’d have to pay for yourself with a lease.
    • Commitment. Most leases last several years, but you can get a subscription for as short as a month.
    • Flexibility. Subscribers get the benefit of switching between cars more quickly, sometimes even in the middle of the subscription. That means you might drive a trusty economy car for commutes but switch to a snazzy convertible for a weekend trip.

    Test drive a car near you

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

    Pros and cons of using car subscriptions

    Pros

    • Flexibility. You can change your car if you need a specific type of vehicle or simply for variety.
    • Free benefits. Most subscription services include roadside assistance, maintenance and customer care to leave you with less worry and more driving.
    • Hassle-free. With the service provider taking care of all the typical car costs, all you have to do is pay your monthly fee and fill up the fuel tank.
    • Use as a trial for a potential car purchase. Suppose you want to buy a sports car or luxury vehicle. Using a subscription service, you can try the exact model you like for an extended period, giving a true-to-life impression of what a car is like to own.
    • Peace of mind. Driving a new car means a warranty covers you, so you generally won’t have to worry about any unforeseen repair bills.

    Cons

    • Harder to add additional drivers. Adding an extra driver may require preapproval, making it more complicated if you need a friend or family member to drive the car in an emergency.
    • Could cost more than traditional financing. It could cost more than traditional car financing over time because you never get to recoup the cost by selling or trading in your car.
    • You’re paying depreciation on a car you don’t own. Car subscriptions make a profit from passing the value of depreciation and maintenance to you through your monthly fee.
    • Deposit or membership fees. Some of the car subscription programs require a sizeable deposit and membership fee to join.
    • Usage restrictions. Many services apply annual mileage limits and might restrict you to private, with no business or commercial trips allowed.
    • Limited model choice. Car manufacturers may limit the models available as part of their subscription plans or limit your car swaps to a certain model range.
    • GPS tracking. To verify how much you’ve traveled as well as keep tabs on the car’s location, you might have a tracking device installed.
    • Cars may not be new. Although car manufacturers will no doubt supply you with a nearly new model, some of the startups use cars that are already three or four years old.

    What kind of insurance do I need for subscription car rentals?

    Most services include car insurance as part of the subscription, but a few third-party companies like Fair or Borrow don’t. These companies tend to offer lower prices for their cars overall, which may account for the lack of insurance. However, they may offer insurance as an add-on to your subscription.

    In addition, you can get extra coverage on top of the company’s insurance or opt for your own if it’s not included. Coverage to consider for your subscription car:

    • Liability. If your service doesn’t offer insurance, you’ll need coverage for property damage and bodily injuries at least.
    • Uninsured/underinsured motorist. This covers damage that an underinsured driver can’t afford to pay and is helpful when not included in your subscription.
    • Comprehensive. Similar to a lease, this coverage may be required for theft, fire or storm damage.
    • Collision. A cheaper subscription without insurance may still require physical damage protection for at-fault accidents.
    • Gap. Consider coverage to pay off your subscription if the car gets totaled before a long-term contract ends. However, this may not be as helpful for short terms that last one or two months, since paying for the rest of the contract is easier.
    • Personal injury protection. This coverage takes care of medical bills, income loss and sometimes other services like child care. It may be required in certain states.
    • Rental reimbursement. You may want to get another car covered by insurance if your subscription car needs repairs. However, you might check to see if your company automatically switches you to another car in that situation.

    Compare car insurance for subscription rental cars

    Name Product Roadside assistance New car protection Accident forgiveness Safe driver discount Available states
    Progressive
    Optional
    30%
    All 50 states
    Discover coverage that’s broader than competitors, valuable discounts up to 30% off and perks like shrinking deductibles that reward no claims.
    Clearcover
    Optional
    Yes
    AZ, CA, IL, LA, OH, TX, UT and WI
    Get instant online support and score a low rate thanks to online data that sets premiums automatically.
    The AARP Auto Insurance Program from The Hartford
    Optional
    Yes
    All 50 states & DC
    Drivers over age 50 can enjoy low rates and perks designed for mature drivers, plus freebies and AARP member perks like free replacement cost coverage.
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    Compare up to 4 providers

    Which cities offer subscription car services?

    Subscriptions are just now trending in the world of driving unowned cars, and that means manufacturers are testing in smaller areas rather than going nationwide. Typically those markets are major cities like Atlanta, Dallas, Los Angeles or Nashville.

    However, a few companies have expanded to several states like Pennsylvania or Rhode Island, especially third party companies who aren’t linked to manufacturing. You might expect to see these third parties expand more quickly since subscriptions are their main revenue.

    What do I need to apply for a car subscription?

    Unlike a lease, car subscriptions don’t usually require a mound of paperwork. To apply, you’ll likely need:

    • Driver’s license
    • Credit card

    During the application process, the company may check your driving record and credit history to make sure you’re not a high risk for using its service. The company might also require you to be older than 21 or 25, much like renting a car. While most drivers can get a subscription, some high-risk drivers might not qualify, depending on the company’s policy.

    Bottom line

    A car subscription could curb your craving for an all-inclusive ride that’s free from worrying about insurance or maintenance. This service often lets you swap out your car within the service period, sometimes even within the same month.

    However, some third party companies offer used car subscriptions at a cheaper rate, which might still mean shopping for the best insurance provider for you.

    Frequently asked questions about subscription car services

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