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Compare car subscriptions vs car leasing

We look at the ways that car leasing and car subscriptions differ, helping you make the informed choice.

What is the difference between a car subscription and a car lease?

In the past business owners, self-employed workers and employees have turned to leasing as an alternative to car ownership but with new options on the market such as carbar’s car subscriptions services, is leasing still the easy choice?

Length of Commitment: A Shorter Contract or Longer Term Commitment?

Want to lease a car? You’d better enjoy driving it for a few years. Generally speaking, leases can be an affordable way to access vehicles, but they aren’t the most flexible arrangements in the world.
Leases can vary in length based on their type and the lessor, but broadly you can expect to commit to a particular vehicle and a lease structure for at least two years. In some cases, the minimum term may be as long as five years.
These lengthy terms can be a real cause of irritation. Car subscriptions services offer an alternative that fits you now, with the ability to make changes later to ensure it stays relevant to how and where you’re at.

Car Subscriptions with no minimum term

With no minimum term – only a two-week notice period for changes and cancellations – car subscription is the flexible way to keep you moving.

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Upfront Costs or Additional Flexibility

Many pursue car leases as a way to minimise their upfront costs and compared to purchasing or taking a chattel mortgage out on a vehicle, this can make a lot of sense. However, where it falls down is where you begin to compare it to other options.
Yes, it’s true that a car lease requires less of an upfront expense compared to a traditional loan, but it can still require some degree of capital expenditure. Many lessors will require some kind of deposit as a security for the lease.
For those trying to strengthen their cash flows, an outlay of a couple thousand dollars simply to access a vehicle could be more than they can afford.
By comparison, you can get a car subscription through carbar with minimised upfront costs, allowing you to start driving sooner and with less stress - plus with carbar Loyalty, the longer you stay, the more you save.
We also offer assistance and guidance to customers buying a new car and partner with CarClarity to facilitate online car finance comparison, ensuring the best deal for your driving needs.

How Car Subscriptions beat leases in upfront costs

It’s true that a car lease requires less of an upfront expense compared to a traditional loan, but a car subscription service minimises the upfront cost without the long-term commitment.

Car financing made simple

Car financing made simple

Through our partnership with CarClarity, you can…
  • Get an instant estimate
  • We’ll organise an inspection
  • Get paid in advance
So if you’re considering buying a new or used car with finance, let us help you do it the easy way!

Accounting Requirements

For businesses, car leasing may have been the preferred way to build a fleet in the past, but recent changes to reporting standards could affect that.
In effect from the financial year 2019-2020, AASB 16 – a document issued by the Australian Accounting Standards Board – lays out new bookkeeping requirements for businesses making use of leases.
Previously, the costs of these leases could be kept off the balance sheet, minimising your reportable debt. AASB 16 requires that businesses now record the costs of use of the leased asset and the associated benefits on its balance sheet.
This has two key impacts:
Firstly, it dramatically increases the amount of reporting required by businesses leasing vehicles.
Secondly, it potentially affects your ability to access credit, as your business will now have to record significantly more in debts on your books
Check out more on car subscription for business.

Car Subscriptions simplify fleet management

Car subscriptions services are not affected by the changes contained in AASB 16, meaning that any business looking to keep its fleet management simple and its reportable debt low might want to consider making the switch.

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