Research released by car subscription company Carly suggests four in 10 Australians would consider their service as an alternative to purchasing or leasing a car.
In the research it was Generation Z (18-14 year olds) that had the highest preference to a no-strings subscription services. 50% of Millennials were also interested and 47% of households with children would consider it.
Carly commissioned OmniPoll © to conduct the nation-wide research, which noted a clear generational shift towards car subscription. The survey found that digital natives – Generation Z and Millennials, were the demographics most likely to reject traditional ownership or leasing options in favour of subscribing to a car.
The financial pressures created by COVID-19 were also found to be a key factor in consumer attitudes towards car subscription, with 18% of Aussies more likely to consider it the best way to obtain a car, compared to six months ago, as they try to recession-proof their finances.
The top two features driving interest in car subscription across all demographics are ‘all car running expenses are included’ and ‘no deposit needed’. The latter is unique to Carly, as the only car subscription company in Australia that does not require an upfront deposit.
Compared to six months ago, of the 38% of Australians considering subscribing, 42% are now more likely to consider car subscription as the best way to obtain a car. Of the 31% of Australians currently extremely or very worried about their financial situation due to the pandemic, 46% would consider car subscription and 24% are more likely to choose it now.
“Car subscription is a hot topic right now,” confirms Carly CEO Chris Noone. “Australians are looking at various ways to de-risk their finances in light of COVID-19, with big-ticket expenses such as mortgages and car loans causing the greatest concern. For more Australians than ever, a subscription model presents a familiar and risk-free alternative to a big financial outlay.
“Our own figures have indicated that Australians are increasingly interested in car subscription, with a +43% increase in live subscriptions in June (vs. March 2020). This can be compared to retail sales of new passenger vehicles and SUVs, which declined by 18% in the June 2020 Quarter vs. the March 2020 Quarter (VFACTS June 2020). However, we wanted to have an accurate understanding of the level of consideration for car subscription, the key drivers, the genuine level of intent in terms of uptake and if that is being driven by the impact of COVID-19 on the economy and their financial circumstances – this is what drove us to conduct the nation-wide survey.”
Carly’s research was conducted in June 2020 by OmniPoll and surveyed a sample of 1,228 people aged 18+. The results are post-weighted to the Australian Bureau of Statistics census data, providing the first-ever statistically reliable insights into the attitudes of Australians to car subscription and how they are becoming increasingly favourable – even as the economy slows.
The research found that car subscription is on the national agenda, with consistent figures registered across all states and territories. Queensland showed the highest interest, with 41% saying they would consider a shift to car subscription.
The demographics most likely to be hardest hit by COVID-19’s devastating impact on jobs and financial security overwhelmingly embraced the idea of car subscription. Generation Z (18-24 years), is leading the charge, with 69% indicating a preference for a no-strings-attached subscription option. Millennials (25-34 years) followed closely behind at 50%, while 47% of households with children would also consider subscribing to rather than purchasing their next family car.
The survey found two key features underpinning interest across the demographics. The most important is ‘all car running expenses are included – no surprises or hidden costs’. Secondly, respondents indicated that the ‘no deposit ’ feature, which is unique to Carly car subscription, was a real incentive.
The variable addressed in the research was the impact of COVID-19 and the current economic climate on attitudes to car subscription. With Australia now experiencing high levels of unemployment and the economy in recession, is this driving interest, and importantly, the intent to take up car subscription? The results indicate that this is the case: of the 38% of Australians now considering car subscription, 42% are more likely to consider this option as the best way to obtain a car compared to six months ago.
The research also revealed that 31% of Australians are now extremely or very worried about their financial situation. Of that group, 46% would consider car subscription and 24% are more likely to choose it now, confirming the real growth potential for car subscription in the current economic climate.
“The research indicates that the conventional wisdom of long-term car ownership is fast losing ground, accelerated by the impact of COVID-19, with many Australians saddled with cars they can no longer afford to drive, repay or maintain. In the current recession, spending big on material possessions like cars – or taking out loans to eventually own them – is now considered a risky move,” says Mr Noone.
“Australians are turning their attention to car subscription because the financial risk is negated by the ability to stop their subscription at any time, without any financial penalty – at Carly, you just need to give 30 days’ notice. This is the perfect card to have up their sleeve to immediately alleviate expenses should their employment or financial circumstances change. Carly’s unique offering of no upfront fee or deposit further mitigates risk in the minds of Australian consumers.”
While the full impact of COVID-19 on the economy is still unknown, Carly’s online operating model and cloud-based technology mean the business is positioned to cope with future operational challenges and to deliver a product Australians can easily access. And, there will be no shortage of car availability as Carly has partnered with multiple vehicle suppliers (including a recent partnership with Hyundai and investment from SG Fleet), creating a new and recurring revenue stream for the automotive industry at a time when car sales are at a 30-year low.
“Carly’s flexible vehicle access and no deposit offering is an appealing, low-risk financial solution for Australian consumers recession-proofing their lifestyle,” says Mr Noone.