Own a Car or Subscription?

Cars Parked Outside on Concrete Road

For many drivers the question is no longer “Should I buy a car?” It has now become “Should I even own a car?

With car subscription models becoming more popular because of its simplicity: one monthly fee, less paperwork, and free surprise costs. Instead of juggling loan repayments, insurance renewals, road tax, maintenance, and depreciation, drivers pay a single fee that bundles several of these expenses together.

That being said, is a car subscription actually cheaper once you factor in road tax and insurance? The answer depends on what kind of driver you are, how long you plan to use the car, and whether you value lower monthly commitments over long-term ownership benefits.

Understanding What You Are Really Paying For

Car ownership often looks cheaper at firsts because people usually compare only the monthly loan instalment against the subscription fee. However, that comparison leaves out several important costs.

Owning a car typically means paying for:

Monthly hire purchase instalments
Motor insurance
Road tax
Schedules servicing and maintenance
Wear-and-tear items (tyres and batteries)
Repairs outside of warranty
Depreciation
Administrative time spent renewing and managing all the above

Road tax is not optional. In Malaysia, all vehicles must have valid insurance coverage of the road tax renewal, and is typically renewed every six months or one year.

Subscription models, on the other hand, often bundles insurance, road tax, and maintenance into the monthly fee, which is typically overlooked when comparing with car ownership.

The Hidden Problem With Cheap Ownership

Let’s say your car loan is RM1,100 per month. A subscription for a similar vehicle might be RM1,700 per month. At first, ownership appears cheaper by RM600.

In reality, you still need to:

Pay your annual insurance premium.
Renew road tax
Service the car several times a year
Replace tyres, pay for breakdown issues, or absorb the cost of unexpected repairs once the warranty period ends.

When these expenses are spread across the year, the true monthly cost of ownership may be closer to the subscription price than expected. This doesn’t necessarily make subscriptions cheaper, but it does narrow the gap.

Where Road Tax Changes Calculations

Road tax is often treated like a minor yearly expense, but it matters more than people think because it is a part of the broader cost attached to ownership.

When you own a vehicle, road tax renewal is your responsibility. You need to ensure your insurance is active, handle the renewal process, and bear the cost yourself. JPJ states that valid insurance coverage is required for the period of Motor Vehicle License (LKM) applied for.

In a subscription model, road tax is usually bundled into the monthly fee. That means:

No separate annual lump-sum payment
No renewal admin on your part
And less risk of forgetting a compliance related task

While road tax alone may not determine the cheaper option, combined with insurance and maintenance, it becomes a part of the convenience premium built into subscription services.

Insurance Makes a Bigger Difference Than Most Drives Expect

Insurance is where the cost comparison becomes more meaningful.

Motor insurance premiums vary based on vehicle type, insurer pricing, and your No Claims Discount (NCD). NCDd rewards drivers for claim-free years, gradually increasing up to 55% after 5 consecutive claim-free years. Bank Negara Malaysia has also noted that the NCD structure remains unchanged and is transferable from one insurer to another.

What Happens to Your NCD If You Stop “Owning” a Car?

This is the part many drivers overlook.

When you use a car subscription, the insurance policy is usually not under your personal name. This means you may not continue building your own NCD during the subscription period.

If you later choose car ownership, your NCD progression may have paused. For drivers with high NCD levels, this can quietly increase long-term insurance costs.

So, Is a Subscription Actually Cheaper?

It can be, but only in certain situations.

A car subscription tends to make more financial sense when:

1. You want short-to-medium term use

Subscriptions avoid large upfront costs and resale concerns.

2. You want cost predictability

Insurance, road tax, and servicing are bundled into one payment.

3. You do not want repair risk

Maintenance costs are typically covered.

4. You are not heavily invested in long-term NCD savings

For first time drivers or those prioritising convenience, this trade-off may be acceptable.

Ownership makes more sense when:

1. You plan to keep the car for many years

Costs improve once the loan is paid off.

2. You have built a strong NCD

That discount can meaningfully reduce your annual insurance cost.

3. You are comfortable managing renewals and maintenance

Organised owners with reliable cars often save more long-term.

Turning a Mandatory Cost Into Extra Value

While road tax and insurance are unavoidable parts of owning a car in Malaysia, some platforms are turning these routine expenses into opportunities for added value.

PolicyStreet’s Drive+ membership comes with a range of perks for drivers renewing their motor insurance through the platform. Instead of simply paying for insurance and road tax each year, members can unlock additional benefits designed to make vehicle ownership more affordable and rewarding.

Another way drivers can enjoy more savings is through PolicyStreet’s 10+10 promo. Drivers can save 10% off insurance premiums (after NCD) and an additional RM10 off a checkout when you renew your car insurance from the 1st to 24th of the month at 10-11AM or 10-11PM.

Final Takeaway

Car subscriptions are best seen as a convenience-driven option, not necessarily the cheapest one.

They may look expensive at first, but they include costs like insurance, road tax and maintenance that car owners pay separately.

At the same time, drivers should consider the long-term trade-off. If you stop personally insuring a car, your NCD may stop growing.

Ultimately, whether a subscription is cheaper depends on how long you plan to drive, how much you value convenience, and how important future NCD savings are to you.