Published on November 13th, 2019 | by Subhash Nair0
Cheapest Car Subscriptions in Malaysia & Why You Might Try It
One of the most iconic marketing campaigns ever mounted featured this slogan:
“You never actually own a Patek Philippe. You merely look after it for the next generation”
My, my haven’t consumer values changed over the last 20 years? Back then, spending more money came with the implied promise that the product would last forever but in 2019, just about every industry is shifting to a subscription model, and that includes the car brands.
Malaysia isn’t usually at the forefront of cutting edge sales models, but this year alone we saw at least 3 serious car subscription providers launch their services. The independent Flux, and the somewhat Tan Chong affiliated Renault and GoCar Subscriptions.
And if you’re reading this article you may be intrigued by the prospect of a car subscription. Or you may be a little confused as to how it all works, why it costs so much, and why anyone would seriously consider taking up a car subscription. Well, that’s not the point of this article. The point of this article is to show you where to start if you’re looking to subscribe to the car for the absolute lowest price.
The What and Why
But before we actually dive into that, it’s probably best to just address those three questions quickly.
- How it all (usually) works – You apply through an app or online form, they check your credit rating, you pick a car and a plan, you commit to the plan’s tenure, pay a security deposit and pay monthly via auto debit or your credit card.
- Why it costs so much – Yes, it’s not as cheap as the monthly payment on a 9-year loan. But with a subscription, it’s what you’re NOT paying for. You’re NOT paying for the road tax, insurance, the 24/7 roadside support, the interest on your loan, the scheduled maintenance, the free replacement car if it breaks down and most importantly the depreciation. You’re paying for all the BENEFITS of car ownership, and the true costs of ownership are bundled into a neat & transparent monthly payment.
- Why would anyone subscribe to a car? – It’s really in its trial stages, just like ride-sharing was just a few years ago. But the reality is that regulations and electronics are making cars more complex with every new generation. The reality is that reliable, qualified mechanics are harder to find and charge more nowadays. The reality is that used car values are getting impossible to predict even by looking at brand strength. Rather than gamble on your car ownership experience, a car subscription guarantees mobility and the joy of driving. With the risks and pitfalls being largely absorbed and externalised into the monthly fee. That’s the pitch.
OK. Now that you’re at least mildly interested in the prospect, what’s the cheapest way into car subscription in Malaysia?
Here’s the bad news: It’s deliberately difficult to do an apples-to-apples comparison and there is no right answer.
Here’s the good news: Each of these services has its strengths and weaknesses, so you can decide what’s best for you.
The players: Flux, GoCar, Renault. Blue, Green, Yellow. How convenient, it’s like they had an earlier discussion to avoid wearing the same clothes to the party.
We decided to look at the cheapest possible ways into each of their subscription services. While some of the information may change, this is essentially how they stack up.
I hope you can immediately see how unfair of a comparison this is. Flux is the only service offering an A-segment hatchback vehicle to start off, while GoCar starts off with a B-segment sedan (which is more practical, but less flashy, more poorly equipped). Meanwhile, Renault Subscription starts itself off with the ‘largest’ and most expensive vehicle here, the B-segment crossover Captur. It also happens to be the most powerful vehicle here with a 1.2-litre turbocharged engine and a 6-speed dual-clutch transmission.
This is the fixed deposit that each service demands. Flux’s RM75 is considerably higher than GoCar’s RM10 one-off membership fee. Renault asks for no non refundable deposit at all.
For Flux, the Security Deposit is calculated based on a number of factors. The figure we’re working with is for your typical Malaysian with a good credit rating. For GoCar and Renault, their security deposit is RM2500. That’s about RM900 higher than Flux’s number BUT Flux’s number may go up or down depending on how confident they are in the subscriber. Flux also calculates this based on the price of a monthly subscription as well. More expensive cars will require a higher security deposit. Yes these are refundable deposits, but you need to have the cash or credit available to get into the service, so the differences are worth noting.
Until the end of 2019, GoCar has hands down the cheapest first-month rate of all three subscription services. Granted, to benefit from this 50% discount, you have to sign up for a 3-month subscription. The other brands are not having any promotions with regards to the first month’s fees as of writing this article.
Price, Tenure and Range
Here’s where things start getting really interesting and difficult. This whole article is about finding out which of these is the most affordable way into a car subscription service. On paper at least, Flux takes a very obvious win with its RM814/month Kia Picanto, an even sweeter deal considering Flux covers all maintenance items at that price AND has a concierge service that delivers the car for maintenance. BUT
- As we were researching this article, both their Kia Picantos were booked. Whether they will be restocked at all is unknown
- That price quoted is for a three-year tenure with just 15,000km of range a year. A month-to-month contract with this car with unlimited range would have cost RM2,002
GoCar, on the other hand, offers the Nissan Almera at RM1,600/month. That’s about double what the cheapest Flux car is, BUT
- They’ve probably got a huge supply of Almeras
- That price quoted is for any tenure, down to a single month of use and it comes with unlimited range. In fact, a three-month tenure will give you 50% off your first month as stated above (for a limited time only)
Finally, we have Renault, who strike a decent middle ground with an RM1,299/month fee for their most affordable vehicle. 20,000km a year is quite reasonable, but wear & tear items like tyres, brake pads and suspension dampers aren’t included.
Like the GoCar subscription:
- Renault probably have a huge supply of Capturs on hand
And like Flux:
- The tenure for this price is longer at 2 years. Sure, a little shorter than Flux, but still not as flexible as either GoCar or Flux on paper.
As we stated before, this isn’t the apples-for-apples comparison you might have hoped for. There’s no way to fairly say which of these is cheaper, as the vehicle types, the tenures and add-ons really differ between each. We would put it this way.
If you’re just curious about how this all works and want to try it for yourself, GoCar’s your best bet. We’re sure the Subscription model is just an extension of their car-sharing model so you could skip a lot of fees and restrictions by just trying that out for a few days. Or you could dive into a three-month subscription while the 1st-month promotion is still available and you’d be looking at paying about RM4000+ for 3 months with an Almera + fuel and parking costs.
If you’re an expat living in Malaysia then both Renault and Flux have pretty good deals for you.
Flux’s strengths are:
- their large, diverse fleet that caters for all price points and needs
- their highly modular packages that cover additional range, multiple tenure lengths, car swapping, and more
- their concierge service that eliminates time wasted driving to get maintenance work done
- a 3-day trial period in case you picked the wrong car
- some price advantages in the add-ons
Renault’s strengths include:
- A more reasonable default range of 20,000km/year
- More reasonable default tenure of 2 years, given many expat contracts and visas are renewed every 2 years (though Flux can be configured for 2 years too)
- More consistent availability of models, since Renault has greater control over their supply of vehicles
So, that’s more or less the state of car subscription in Malaysia in 2019. Again, don’t bash it just because the monthly payments seem more steep than your typical hire purchase loans. Remember that these providers are also absorbing a lot of risk, many running costs, all the depreciation, and more. What you’re paying for is the utility and other intangible benefits of having 24/7 access to a car.
For more updated or accurate information, please contact these respective brands.