Car subscriptions, although not without drawbacks, have long been billed as the ideal solution for those who want personal mobility but without the hassles usually associated with buying a car.
Toyota has been quite prominent in this space with its Kinto One offering, as have service providers such as Drivee and FlexClub.
And now Zeda Limited, which holds the licence to the Avis brand in South Africa, has teamed up with FlexClub to roll out a new-and-improved car subscription offering aimed at making it easier for customers to tailor a package that suits their needs.
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Based on the Avis pay-as-you-go subscription service that was first piloted in 2021 and launched in 2023, the improved service now allows customers to configure and manage their prepaid car subscriptions online.
“The latest pay-as-you-go innovation builds on learnings from Avis’ entry into the subscription economy in 2021. It addresses the growing gap left by traditional vehicle finance in South Africa, where more than 70% of the demand for new cars is unmet,” Zeda said.
FlexClub CEO Tinashe Ruzane said the company has seen a clear shift in consumer behaviour since 2020, with more people opting for greater control and flexibility over rigid long-term financial commitments.
The website offers a number of options to consumers, allowing them to choose their preferred vehicle and build a plan that suits their needs.
Current offers listed on the website include a Toyota Vitz 1.0 XR manual for R6,780 per month; a Hyundai Grand i10 1.0 Premium, Toyota Starlet 1.5 Xi or VW Polo Vivo 1.4 Trendline for R7,860pm, while a Kia Sonet 1.5 LX can be had for R9,030pm, to name just a few examples.
Furthermore, a Volkswagen T-Cross can be subscribed to from R12,600pm, while larger SUVs such as the Toyota Corolla Cross 1.8 XS and Volkswagen Tiguan 1.4 TSI can be had for R18,900 per month.
Luxury cars such as the Audi A4 (R21,660pm) and Toyota Fortuner 2.4 GD-6 (R22,530) are also available, as are luxury vans like the Mercedes Vito (R23,310).
Rent versus subscribe versus finance: How do the costs compare?
For the sake of comparison, a Toyota Vitz XR, which costs R6,780 to subscribe to, would cost around R9,488 for a month on a normal day-to-day rental contract, while buying that same car and financing it over 72 months with WesBank at 12.5% interest would lead to a monthly instalment of around R4,451 per month.
While these subscriptions are more expensive than the monthly instalment on a new car, and you don’t get to own it at the end of the deal period, they do provide a measure of flexibility for those not looking to commit long-term, as well as protection from depreciation knocks, with the Avis pre-paid plans ranging from one month to 48 months with next-day collection.
The plans also eliminate the need for credit checks, although a credit card is required. Insurance is included but buyers are still liable for excess mileage, fuel and insurance excess, while additional drivers will also command an extra fee.
The monthly subscription fee stays the same regardless of the term period, however FlexClub told IOL that the company is currently in the process of enabling subscribers to customise more features in their plan, such as additional mileage, city flexibility (one subscription for a car in any city) and the ability to fix their price for longer periods.
IOL