EV Rental VS Subscription VS Finance, what is right for you?
24 March 2023
Electric vehicles (EVs) are becoming increasingly popular due to their many benefits, such as reduced emissions and lower fuel costs. If you’re interested in driving an EV, there are several options available to you which are vastly different between cost, duration, flexibility and ownership. In this blog, we’ll explore three popular options for driving an EV in today’s market. So let’s deepdive into EV Rental VS Subscription VS Finance and find the right one option for you.
Option 1: Short-term EV rental with a platform like evee
One option for driving an EV is to rent one for a short period from a platform like evee. evee is a peer-to-peer car-sharing platform that allows you to book and rent EVs directly from their owners. This can be a great option if you need a car for a week or less, and you want to try driving an EV for a short period of time before committing to purchasing one.
The cost of renting an EV from evee varies depending on the make and model of the car, as well as the location and time of year. Generally, they are more expensive on an average daily rate so you may not wish to rent them for longer periods of time. You can expect to pay between $1,300 and $2,300 per week for a used 2022-2023 Tesla 3 rental from evee. *Price is dependent on the individual host. This cost estimate was taken from a Brisbane based sample using the evee website.
Evee rentals are perfect for anyone wanting to drive an EV for a short period of time.
Option 2: Mid-term EV subscription with Karmo
If you’re interested in driving an EV for a longer period, but you don’t want to commit to purchasing one, you can consider a mid-term subscription with a company like Karmo. Karmo offers brand new EVs for flexible mid-term periods of your choice. You can select form as little as a week or up to nine months. The cost for a brand new Tesla 3 on a 4 month subscription, start as low as $399 per week based on a 4 month subscription. *Pricing may change based on location and duration.
This option can be an excellent way to try out driving an EV for an extended period without the commitment of long-term finance options. Karmo takes care of all the maintenance, registration, roadside assistance and insurance, so you don’t have to worry about any additional costs. You will also have your car replaced with a brand new one at the end of your term if you decide to subscribe for another period. Plus, you can change your make and model at the end of each term so you’ll never get bored of driving and you never have to worry about selling your car! This is what Karmo refers to as a permanent new car experience.
Karmo’s EV subscriptions are perfect for anyone who wants to enjoy driving an EV for a flexible period of a week, several months or even years, without the financial risk or hassle of traditional ownerships. The benefits of Karmo car subscriptions are endless.
Option 3: Financing an EV through finance companies such as Pepper Money
Now, if you’re ready to commit to the purchase of an EV but don’t have the cash on hand to pay for it outright, you can finance your purchase through a finance company like Pepper Money. Pepper Money currently offers EV finance with a fixed rate of 8.29% p.a. (9.60% p.a. comparison rate^) – subject to change, for full terms visit the Pepper Money website.
Source: Paper Money
Meaning, financing your EV purchase can be a great option if you want to spread out the cost over a longer period. You can typically choose your loan term and repayments, and you’ll own the car outright at the end of the loan term. On the other hand, the downside is if you want to avoid balloon payments, you can expect a much higher weekly repayment rate than a car subscription. Another cost you need to factor the ongoing costs of car ownership such as registration, servicing and maintenance, insurance and roadside assistance. These costs partnered with depreciation of the car over the finance term can result in an expensive outlay and a lack of flexibility.
Financing is perfect for anyone who prefers traditional ownership, has the financial capacity, and is ready to commit to long-term finance contracts.
EV Rental VS Subscription VS Finance
So, if you are still confused on which is right for you, let’s look at the details more closely for each.
| Renting | Car Subscription | Finance | |
| Ownership | No, temporary possession for a short period of time | No, temporary possession for normally 4-6 months with the flexibility to switch vehicles at the end of the term | Yes, full ownership of the vehicle |
| Minimum Driving Age | 25-30 *Age is dependant on the vehicle type | 25 years for subscription | 18 years |
| Finance application and eligibility | No finance or credit checks. You must submit the following: – A copy of your in-date Drivers Licence – A live selfie – Payment details – Personal details | No finance application or credit checks. Eligibility criteria include: – Must be between 25 and 65 years old – Australian or international driver’s licence – Medicare card or passport – Bank statement – Payslip – Driver declaration | Yes, full finance application and credit check is required. |
| Upfront Costs | The full rental fee is authorised on your credit card when requesting a booking. You will only be charged once the booking is confirmed. The security deposit is between $500-$1000 depending on vehicle type, and is authorised 24 hours before start of the rental period which will be released after the vehicle has been returned undamaged. View T&Cs for full fees and charges. | Low, with a one-time $300 deposit fee and monthly subscription fee refunded upon return of your undamaged vehicle. Two week rent also required upfront. | High, including down payment and loan fees including loan establishment fee of $474, security registration fee $6. View T&Cs for full fees and charges. |
| Recurring Payments | NA, full cost charged upfront. View T&Cs for full fees and charges. | Fixed subscription fee charged weekly starting from $399 for a Tesla 3 which covers the vehicle, registration, insurance, roadside assistance and maintenance, and admin costs. *The longer you subscribe, the cheaper the weekly fee may be. Cost may change based on your location. View T&Cs for full fees and charges. | Loan repayments charged weekly plus account administration fee at $8.90/month. View T&Cs for full fees and charges. |
| Additional costs | Besides the booking costs, you may incur additional costs if certain conditions are or are not met. These include: – Exceeding the distance included – Returning your rental late – Returning your car in a dirtier than expected – Returning your rental with a lower battery level than expected – Tesla Supercharger costs – Tollway costs – Delivery costs (if chosen after the booking request was submitted). View T&Cs for full fees and charges. | The driver is responsible for: – Charging – Tolls – Speeding fines – Damage outside of the insurance policy – Cleaning if the car is returned in a dirty state – Excess kms travelled View T&Cs for full fees and charges. | Depending on your contract terms you may have a balloon payment at the end of your finance period. View T&Cs for full fees and charges. |
| Maintenance and Insurance | Included in fee | Karmo car subscription include maintenance, roadside assistance and insurance in the monthly fee | Owner’s responsibility |
| Damage liability fee | $4,500-7,000*Price is dependant on the individual host and this cost was taken from a Brisbane sample | $1,000 | Dependant on owners insurance cover |
| Flexibility | High, you can select any available vehicle on the application | High, ability to switch vehicles according to preferences and needs at the end of each term | Low, limited to the owned vehicle |
| Duration | Duration from 1 day or a few weeks. *Duration will differ for each car as it is dependant on the individual host | Short-term, mid-term or long-term, depending on the chosen subscription plan. Subscription able to be renewed as often as desired. | Long-term, until the vehicle is paid off. Normally 1-7 years. |
| Depreciation | Not applicable to rental | No depreciation impact to driver, as the subscriber does not own the vehicle | Owner bears the full depreciation cost |
| Kilometre restrictions | 250 km per day *Kilometres is dependant on the individual host | 385 km per week *Kilometres may change on vehicle and subscription term. Review T&Cs. Additional Kms will be charged. | Unlimited kms as the vehicle is yours to own |
| Source: evee | Source: Paper Money |
Choosing the right EV provider
If you’re interested in driving an EV, there are several options available to you. Short-term renting from platforms like Evee, mid-term rentals from companies like Karmo, and financing your purchase through a finance company like Pepper Money are all viable options.
Each option has its pros and cons. So it’s essential to consider your individual circumstances and needs such as price, duration, kms and inclusions before making a decision. And always thoroughly read all terms and conditions. With the increasing availability of EVs, it’s never been easier to experience the benefits of driving an eco-friendly vehicle.
EV Subscriptions – Brisbane, Sydney, Melbourne, Adelaide, Perth
If the flexibility of an EV subscription is right for you, enquire with Karmo today. Alternatively, you can learn more about Karmo Car Subscriptions or browse our great range of vehicles.