Car Subscription vs Novated Lease vs Buying: Which One Wins
Owning a car isn’t the only way to have one. Here’s how a car subscription, a novated lease and buying compare, so you can work out which suits you.
How Do They Compare?
Here's a quick look at the key differences between a car subscription, a novated lease and buying a car.
| Car Subscription | Novated Lease | Buying |
| Commitment | Shorter-term, often a few months | Usually 1–5 years | No fixed term if bought outright |
| Payments | Monthly subscription fee | Payments arranged through your employer | Upfront purchase or loan repayments |
| Running costs | Many costs included | Can be bundled into repayments | Generally paid separately |
| Ownership | No ownership | Option to purchase at lease end | You own the vehicle, subject to any finance |
| Flexibility | Generally easier to change vehicles or exit after the minimum term | More difficult to exit early | Free to sell or trade, subject to finance obligations |
Car Subscriptions: Flexibility Without Ownership
A car subscription is great for when you need a car for longer than you’d usually rent one, but not long enough to own one.
With Thrifty YourRide, registration, routine servicing, maintenance and roadside assistance are all covered. There's a minimum 90 day commitment, after which you can continue, request a vehicle change or cancel, subject to the subscription terms. You pay a regular monthly fee, with many of the usual running costs included.
Novated Leases: A Car Through Your Employer
A novated lease is an arrangement between you, your employer and a finance provider. Your employer makes lease payments on your behalf, generally through deductions from your pre-tax and sometimes post-tax salary.
This can offer tax advantages, depending on your circumstances. Running costs like servicing, registration and insurance can also be included in your payments.
However, novated leases typically require a longer commitment. You'll also need to consider what happens if you change jobs, and the residual payment required at the end of the lease.
Buying: The Traditional Approach
Buying a car gives you the freedom to keep it, modify it and sell it whenever you choose.
While purchasing outright means a larger upfront expense, financing lets you spread the cost over time.
The trade-off is that you're responsible for ongoing expenses like registration, insurance, servicing and repairs. You'll also need to consider depreciation, particularly if you're planning to sell or upgrade in a few years.
Which Option Is Right for You?
It really comes down to your budget, lifestyle and how long you need the vehicle.
If you plan to keep a car for many years, buying could make the most financial sense. A novated lease may be worth exploring if your employer offers salary packaging and the potential tax savings outweigh the costs.
But if flexibility is your priority, and you only need it for a short amount of time, a car subscription could be the answer.
This is general information, not financial or tax advice.
Find Your Ride With Thrifty
At Thrifty YourRide, we’ve got flexible car subscriptions with a wide range of vehicles and many running costs included in one monthly payment.
When flexibility wins, explore Thrifty YourRide and find a plan that works for you.