By Leon Gettler, Talking Business >>

IMAGINE a car subscription that would make subscribing to an electric vehicle (EV) like subscribing to a mobile phone or Netflix? It’s nothing like leasing, which is, in financial effect, close to buying a car.

That’s the promise of ASX listed car subscription company Carly, operating on the eastern seaboard, covering Brisbane, Sydney and Melbourne. However, Carly Car Subscription is also online, which means people can access the cars from anywhere.

Carly was bolstered recently by the ruling of the Australian Taxation Office (ATO) – which has applied since August 26, 2020 – allows subscribers to claim the car subscription payments as a tax deduction when the subscription is used for business or work purposes.

Also, businesses that use Carly can claim the full dollar amount of the subscription fee as a deduction if the cars are used in carrying out business and/or provided to employees for their use. Fringe benefits tax (FBT) is payable in respect of the portion of private usage by the employee.

The ATO ruling is being used by Carly to innovate. 

Carly chief executive officer Chris Noone said the ATO ruling meant that people who are not using Carly can get a novated subscription using Carly. The ruling is connected the relationship between Carly and its subscribers. It can also be used as part of a salary package.

“Anyone who signs a novation agreement under this ruling, who takes out a subscription with Carly, will be able to get the FBT exemption on electric vehicles,” Mr Noone told Talking Business.

“What that means in essence is that they can save between 35% and 50% on the cost of a normal subscription for an EV.”

Mr Noone said the product had been launched because car owners were cautious about transitioning to EVs.

“Subscription is a flexible way of getting access to a car,” he said. “A normal car subscription is minimum one month and the salary package that we have is a minimum of three months. That’s a stipulation of the ATO.

“It allows drivers to try an EV for three months or more, get access to the FBT exemption and not have that long term risk of potentially buying a car that wasn’t suitable for their needs.”

This, Mr Noone said, was different to a car lease which was typically two to four years long and came with significant break costs for those who wanted to terminate it in the middle of the lease period.

“Under a lease, essentially what’s happening is the car is being bought on your behalf and you’re entering into a finance agreement for that,” he said.

“With subscription, it’s a more flexible product. Our subscriptions are normally minimum 30 days and 30 days notice to return the car. So you could have a car for six or seven months of the year, or you could take it on for one month and have a one month recurring subscription.

“When people feel they want to change the car or they no longer need the car because their work circumstances have changed, let’s say they have gone overseas, or they are taking the bus to work, they can give it back.

“It can just be a monthly recurring subscription, like your mobile phone, like your Netflix, and you just give 30 days notice to hand the car back,” Mr Noone said. 

www.carly.co

www.leongettler.com

Hear the complete interview and catch up with other topical business news on Leon Gettler’s Talking Business podcast, released every Friday at www.acast.com/talkingbusiness

https://shows.acast.com/talkingbusiness/episodes/talking-business-36-nathan-cheong-from-melrose-health-group

TESLA’s novel and innovative approach to sales, marketing and loyalty with owners and potential owners has disrupted the automotive industry globally – and virtually – almost from day one.

Ben Whitmore, the chief marketing officer at automotive ‘subscription’ innovator, Brisbane-based eCar Subscription, sees Tesla’s latest leanings into the subscription models – many pioneered by the US tech. sector – driving other auto manufacturers to follow the lead.

“Tesla and BMW’s shift into subscription-based models represents a significant transformation in the automotive industry, as it fundamentally alters the traditional vehicle ownership experience,” Mr Whitmore said. 

“We believe that this trend will likely lead to broader adoption with manufacturers, as it allows them to create ongoing revenue streams, while offering their consumers access to advanced features and services without all the hefty upfront costs.

“However, this approach could create further barriers for Australian consumers, potentially obstructing the adoption of EVs at a time when the market is already facing challenges.

“By pushing for subscriptions, manufacturers risk alienating potential buyers who might feel that they are not getting the full value of their investment, which could cause complications around EV adoption.”

EV resale values in question

Mr Whitmore warned this approach could affect the sell-on value of EVs, “which is already a major barrier for Australian consumers”.

“The shift towards subscription-based models for more advanced features in EVs could significantly impact the resale value of these vehicles,” Mr Whitmore said. “As manufacturers move towards limiting core functionalities to subscription fees, consumers may feel uneasy about purchasing a car that may not retain its full value over time.”

Mr Whitmore said the uncertainty of this market could “easily put off any potential buyers, as they’ll be less inclined to invest in a vehicle that could experience ongoing costs beyond the initial purchase price”.

“This hesitancy can be linked to new Australian data that shows used EVs have below-average resale values and spend longer on the market. This decline in value, particularly when compared with the broader market, raises concerns about EVs as investments, complicating Australia’s transition to EVs.

“Combined with existing worries over resale value, this could hinder broader adoption.”

Broad impact on auto sector

Mr Whitmore said the wider automotive industry will be impacted in many ways, ranging from car subscription services to rideshare and beyond.

“The shift towards subscription-based models in the automotive industry, particularly with manufacturers like Tesla and BMW, could significantly reshape consumer expectations and purchasing behaviours,” he said.

“As basic functionalities become locked behind ‘paywalls’, consumers may feel disillusioned with the initial cost of electric vehicles (EVs), leading to a decline in overall demand.

“This trend could create a ripple effect across the industry, pushing more manufacturers to shift away from traditional ownership. As consumers face rising living costs, they want more flexibility and are increasingly reluctant to commit to long-term financial plans, particularly when vehicle ownership brings risks like depreciation, maintenance, and fluctuating resale value—especially for electric vehicles (EVs).

“In this environment, purchasing a vehicle outright is losing its appeal, making subscription models a more attractive alternative.”

Challenges for rideshare companies

But this shift could also create challenges for rideshare companies, which are often early adopters of EV technology. 

“As the cost of EV subscriptions rises, these companies may pass those expenses on to consumers, leading to higher ride prices and potentially stalling the adoption of EVs in rideshare fleets, where their environmental impact could be significant,” Mr Whitmore said.

“For Australian consumers already cautious about the financial burden of EVs, rising subscription fees could worsen adoption barriers.”

Ben Whitmore is the CMO for both eCar Subscription and owner East Coast Car Rentals, developing flexible and tailored plans to suit individual and business automotive needs.

www.ecarsubscription.com.au

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DEMENTIA AUSTRALIA was back for a second year in September as the nominated charity for the Penrite Oil Sandown 500, one of the greatly anticipated races returning to the Repco Supercars Championships calendar. 

Supercars, Penrite Racing and Penrite Oil, the major sponsor and partner of the Supercars event, nominated Dementia Australia as their charity partner as a tribute to Dementia Australia patron, Allan Moffat OBE, Supercars Legend, Hall of Fame inductee, and four-time Bathurst 1000 winner who is living with Alzheimer’s disease. 

Dementia Australia CEO, Professor Tanya Buchanan said it was “a privilege to be part of such a significant event in the Repco Supercars Championships calendar”.

“Thank you to Penrite Oil, Penrite Racing, Supercars and most importantly to Allan Moffat and his network of supporters for continuing to give back to the racing community and helping all racegoers to know that if they are impacted by dementia – they are not alone,” Prof. Buchanan said.

“I also thank Steve Grove of Grove Racing who partners with Penrite for his support and generous donation to Dementia Australia in honour of a close family member. The Grove family like so many Australians, has been impacted by dementia.

“Allan Moffat as our Dementia Australia Patron and his support network have been so generous in sharing  his diagnosis and experience of living with Alzheimer’s disease to raise awareness in the community and vital funds for Dementia Australia at fundraising.dementia.org.au/allan-moffat.

“Allan first talked about his diagnosis of Alzheimer’s disease in September 2019 and with his support network he has continued to raise awareness about dementia as a Dementia Australia patron.”

Penrite Oil brfand manager, Jarrod Harding said, “We are so pleased to be working again with Allan Moffat and Dementia Australia.

“It’s a privilege to be able to show our support for Allan, one of my heroes, and for Dementia Australia” Mr Harding said.

“With more than 421,000 Australians estimated to be living with dementia and more than 1.6 million people involved in their care, it’s an important cause for everyone and especially close to our hearts here at Penrite Oil.

“As an Australian family-owned business with strong community values, we feel it's important to give back and support those who need it most.

“As part of the partnership, Penrite Oil will be working with Allan Moffat and his support team to promote Dementia Australia’s work and to encourage community support for the charity’s activities.

“It’s exciting this year as racing enthusiasts at the event [were] treated to seeing a tribute of the 1974 Ford XB Brut 33 Falcon on the 50-year anniversary of Allan’s win at Sandown.”

The three-day race event at the Sandown International Motor Raceway, Melbourne, also prominently featured Dementia Australia’s logo included in the historic livery on Penrite Racing’s Ford Mustangs.  

“Head to dementia.org.au to find out how you can join us to create a future where all people impacted by dementia are supported and welcomed in their communities, no matter where they live,” Mr Harding said.

“I encourage anyone who has concerns about themselves or someone close to them to contact the National Dementia Helpline on 1800 100 500. It’s available for free, 24 hours a day, seven days a week, 365 days a year.”

www.fundraising.dementia.org.au/allan-moffat

www.dementia.org.au

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By Ben Whitmore >>

WE’RE LIVING in an era defined by convenience and flexibility, where the subscription-based economy has become known across many sectors, with younger generations already learning to navigate a world where subscriptions are the norm. 

From streaming platforms to software and fitness, we’re seeing a clear shift from ownership to access. 

But one sector that's just beginning to embrace this shift is the automotive industry.

Could it be the next big frontier in the subscription-based economy? I believe the signs suggest a resounding yes.

Subscribing to consumer preferences

In recent years, we’ve witnessed a dramatic change in consumer preferences. The traditional idea of ownership is increasingly giving way to a model that prioritises flexibility and convenience, reflecting a broader trend where experiences and freedom are becoming more valued than long-term commitments.

Subscription services embody this change by offering access to products and services without the burdens of ownership. 

We’ve seen this trend play out across various industries.

In entertainment, platforms like Netflix and Spotify have revolutionised how we consume media, shifting the focus from owning physical media to enjoying an extensive library of content on demand. Software subscriptions have replaced long-lasting licences, offering ongoing updates and flexibility.

Even in fitness, subscription-based gyms and classes are catering to our needs. 

Driving a new service approach

The automotive industry, however, has been slower to adapt. While traditional car ownership remains deeply established, vehicle subscription services are beginning to challenge this norm.

For millennials, Gen Z, and expats, this model presents a compelling alternative that fits their fast-paced and unpredictable lifestyles. 

Vehicle subscriptions offer a level of flexibility and convenience that traditional car ownership simply can’t match. 

For those who frequently relocate or lead temporary lifestyles – like international students, short-term workers, and expats – the subscription model provides a hassle-free solution.

These consumers appreciate the ability to swap vehicles based on their current needs without the long-term commitment and financial burden of ownership. 

Unlike traditional leasing or ownership, vehicle subscriptions allow drivers to switch between different models and types of vehicles with ease. This flexibility mirrors the convenience of streaming new shows or accessing new software features – experiences that modern consumers have come to expect. 

Whether you need a compact car for city driving or a larger SUV for a road trip, a subscription service can meet these needs without the hassle of buying or leasing multiple vehicles.

Save on parking and other costs?

Another bonus of vehicle subscriptions is how much you can save on parking and other costs.

We all know that owning a car often means dealing with the headache of finding (and paying for) parking, especially in crowded cities. But with a subscription, you might get access to shared parking spots or even dodge the whole parking issue altogether, since you can swap vehicles as needed.

Plus, many subscription services bundle maintenance, insurance, and registration into one tidy flat fee, sparing you from those surprise expenses that usually come with owning a car.

It’s a budget-friendly, hassle-free way to enjoy driving without all the usual stress.

The rise of subscription-based services across various industries highlights a significant shift in consumer behaviour. Although the automotive sector is still emerging in this space, it can be assumed to become a major player in the subscription economy.

As more consumers seek flexibility and freedom over ownership, vehicle subscriptions may well become the new norm.

The signs are clear: the automotive industry is on the brink of a subscription revolution, and the future looks bright.

www.ecarsubscription.com.au

About the author  

Ben Whitmore is the chief marketing officer (CMO) for both eCar Subscription and East Coast Car Rentals. The eCar Subscription service aims to revolutionise the way consumers view car ownership in a subscription-based society. Developed by East Coast Car Rentals – founded in 1979 – the new eCar Subscription service has been making waves in the Australian automotive market, offering flexible and tailored plans to suit individual needs. It allows consumers to access the latest vehicles without the long-term commitment of ownership. www.ecarsubscription.com.au

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