There are several options to choose from when it comes to credit facilities in South Africa, especially when financing a new car. Arguably, the most unique of these is long-term rentals or car subscriptions.
Reasons for choosing this option can vary from person to person, whether that be poor credit, a desire to avoid deposits and balloon payments, or the convenience of not handling insurance and maintenance personally.
Car subscriptions are becoming increasingly popular across South Africa, highlighting the need for increased choice and potentially even a revision of traditional credit agreements.
Several companies offer these arrangements with different conditions, tailoring solutions that potentially suit every motorist’s needs.
Companies that specialise in long-term rentals exist alongside car rental companies that offer it as a separate service, while dealerships can also offer these arrangements.
In very rare cases, there are even outlets that allow for rent-to-own agreements to be struck, although this is not done with brand-new vehicles.
Car subscription prices range from company to company, and are also based on the driver’s choice of vehicle, included features and offerings, rental term, and more.
It must be noted that car subscriptions are more expensive than financing a vehicle, and have certain limitations, including monthly driving distances, but premiums do tend to cover insurance and maintenance plans.
Probably the most popular name in the long-term rental space right now, Drive.co.za, offers a wide range of vehicles, such as the Suzuki S-Presso from R6,999 per month to the BYD Shark 6 from R28,999.
Avis is known for its expansive fleet and long history of car rental, and as such, they also offer their iLease service with prices ranging from as little as R2,927 for small hatchbacks to R60,000 for luxury SUVs.
For those drivers who want to go straight to the source, Toyota offers Kinto One subscriptions for all of its Toyota and Lexus models, including plans for the Vitz, Corolla Cross, and Hilux range.
Renting versus owning
Similar to when you rent a property, long-term car rental or subscriptions mean you don’t own the vehicle you’re driving, while responsibilities like maintenance and insurance also fall on the owner.
The cheapest car offered by most companies is the Toyota Vitz, which is one of South Africa’s cheapest models and sells for R178,800, or R3,915.81 financed over five years at the prime lending rate of 10.25%.
By comparison, Avis offers it at R3,343 before compulsory insurance, while Toyota’s Kinto One plan offers it at R4,051 monthly with insurance, maintenance plan, roadside assistance, and more.
Both companies limit drivers to 1,000km per month for their respective instalments.
Drive.co.za, which has seen its popularity skyrocket, offers the 1.0 XR Vitz for R7,299 per month, with insurance, maintenance, and all services included, as well as a greater monthly driving allowance.
On the opposite end of the range, Avis offers drivers the opportunity to drive the Land Rover Range Rover P530 Autobiography for five years, at over R60,000 per month before insurance.
This luxury SUV has a not-so-little price tag of R4,355,000, or a whopping R93,163.30 to finance.
Toyota will allow car subscribers to drive the Land Cruiser 300 GX-R for R22,243.20 per month, when financing its R1,550,000 price will instead cost R33,218.71.
Drivers interested in driving the most powerful bakkie in South Africa can do so thanks to Drive.co.za, who offer the R969,900 bakkie from R28,999, instead of the R20,821.82 it could cost to finance.
What car subscriptions and long-term rentals offer motorists is peace of mind when it comes to insurance, maintenance, and even roadside assistance, but a limited driving allowance may deter some drivers.
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