Still relatively new to the UK market and with differences between the manufacturer systems, a subscription inherits elements of the PCH (Personal Contract Hire) but gives it a more flexible twist. For example, at Care by Volvo Flexible (see below) the contract includes the rental of a car, but with the option to terminate the contract with three months’ notice. New customers also have a 30-day trial period in which they can return the car.
In addition to fuel and insurance, all operating costs as well as reasonable wear and tear are covered and the customer can opt for a specific kilometer package from the basic kilometers of 6000 per year. (Our example is again based on an annual mileage of 12,000.)
Since Care by Volvo is a rolling three-month contract, customers also have the option of switching to a new / different model after this period or simply keeping their existing car.
Advantages in the car subscription
- All operating costs are covered except fuel and insurance.
- Flexibility to withdraw from the contract with a notice period of three months.
- Low deposit.
Disadvantages of the car subscription
- You never own the car
- Penalties for too many kilometers and above-average wear and tear.
Example: Volvo XC40 1.5 T3 R-Design Auto (rolling 3-month contract, 12,000 annual kilometers)
Monthly fee £ 589.00
Mileage surcharge / month £ 40.00
Total monthly payment £ 629.00 *
Deposit (1 monthly payment) £ 629.00
* Rolling contract for at least 3 months
Private loan
Taking out a personal loan to cover part or all of the cost of a new car is one of the easiest forms of financing. You choose the lender, the best interest rate available, and the length of time you want to repay the loan. You then practically become a “cash buyer” and the car is yours right away, with no restrictions on how long you keep, use or even modify it (although your insurers need to know if you are planning to upgrade).
