Flux, the Malaysian based multi-brand car subscription platform has introduced a new “Subscribe to Own” option which lets you purchase the car at the end of your subscription. With a subscription, you can get a car faster without the hassle of going through a hire purchase application and you won’t need to pay a huge downpayment upfront. According to Flux, you can enjoy up to 33% savings in the first year of ownership.
To recap, Flux offers a variety of vehicles such as compact hatchbacks, sedans, SUVs and even pickup trucks. You can choose between a month to month subscription basis or go for a long term contract of either 12, 24 and 36 months. The monthly subscription comes with a concierge service that takes care of the delivery and scheduled servicing.
The usual car ownership costs such as insurance renewals, road tax and maintenance are fully covered. So, all you’ll need is to pay a fixed monthly cost throughout the subscription period.
If you try to subscribe a new car on Flux, you will now see the “Option to Own” box at the bottom of the screen on the check out page. This will be the locked value of the vehicle should you choose to purchase the car at the end of your subscription. Obviously, the Guaranteed Future Value (GFV) will vary depending on the subscription tenure that you select and it will be higher if you go for a shorter 12 or 24 month contract option.
Previously, Flux requires a refundable security deposit that varies depending on your eligibility. Now they have changed that to a non-refundable start fee which is still significantly cheaper than forking out 10% for a deposit on a brand new car. Similar to your Spotify or Netflix subscription, Flux charges directly to your saved credit card.
At the end of the subscription period, you can either return the car, extend your subscription or exercise your option to purchase the car at the agreed Guaranteed Future Value.
Potential savings versus car loan
Based on the example provided by Flux, you’ll pay 58% less for upfront payment and spend 33% less overall in the first year of ownership for a Honda HR-V E (RRP: RM108,800). The comparison is based on a car loan tenure of 5 years. Since the subscription covers wear and tear, you won’t need to pay for insurance, road tax, servicing and additional costs for wear and tear.
After 36 months of subscription, Flux estimates that the vehicle’s Guaranteed Future Value for the HR-V is currently 9% below the forecasted market price for a 3-year-old HR-V E. Since the GFV is fixed so you won’t have to worry about market price fluctuations.
In the long run, factoring the cost of ownership and interest charges for the purchase in the subsequent years, the Honda HR-V E would cost RM131/month extra than owning a car in the traditional manner.
Even if it costs more Flux highlights that members will benefit from lower expenditure in the first year and you’ll also get to save time with the included concierge service which handles all of your car’s maintenance, administrative and recovery needs. Another benefit by Flux is also the flexibility to swap cars during the subscription tenure without extending the existing subscription contract.
According to Flux Founder and CEO, Aziz Ayman, Subscribe to Own by Flux allows consumers to better manage their car expenses and to lower the barrier to entry for car ownership especially in the current economic climate. With a subscription service, consumers won’t need to fork out tens of thousands of ringgit upfront and this allows them to spread their expenditure more evenly across the ownership journey. On top of that, the service provides the flexibility to decide whether to own the car in the long run.
We are told that the Guaranteed Future Value covers ownership transfer costs but it excludes road tax and insurance. If you need to take a loan, Flux is able to provide assistance to connect you to the respective financial institutions. At the moment, over 90% of vehicles listed on Flux are offered with the “Subscribe to own” option and they are aiming to have all vehicles to support the option very soon.
Like most subscription service in the market, there are limitations of what you can do with the vehicle. On the lowest “Lite” option, the cars come with a capped mileage of 1,250KM per month. You can upgrade this to a standard 2,000KM or unlimited mileage option at an additional cost to your monthly commitment.
At the moment, you can’t drive Flux vehicles to Singapore or Thailand but it is an option that the platform is working on. Flux vehicles are also not permitted for commercial and e-hailing usage.
For more info, you can check out Flux’s website.