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Carly drives the benefits of car subscription for business
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. 
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
