This is what it costs to subscribe to a Toyota instead of buying it

The mindset of SA car buyers is slowly shifting from one of ownership to usage, helped in part by the modern trend of subscribing to music and movies, and the rise of e-hailing taxi services.

A growing number of consumers don’t want to own cars; they simply want to get from A to B, and affordable, long-term car hire can be the right solution for them.

So says Slade Thompson, GM for sales at marketing of Kinto, which was introduced recently as Toyota SA’s in-house vehicle subscription service. Offering subscriptions is a growing trend among car manufacturers, as well as companies not affiliated with particular brands, such as Drivve and FlexClub.

The concept is shaking up the long-held tradition of owning the car you drive, and the introduction of Kinto is a big deal because it is offered by SA’s market leader Toyota, which accounts for about a quarter of all car and light commercial vehicle sales.

Toyota SA’s service launched with Kinto One, a pay-for-use mobility solution on all Toyota and Lexus models except the Hiace Ses’fikile minibus. It takes care of servicing, maintenance, roadside assistance and warranties, all in one transparent monthly payment.

The customer pays only for fuel. The vehicle is returned after the contract period and the total monthly costs are lower than buying a car on hire purchase.

Available for individuals and companies, the subscription service is available through Toyota and Lexus dealerships nationwide and includes a tracking device and Kinto Protect limited liability in the event of theft or an accident. The flexible contract allows the monthly mileage and contract period to be amended at any point.

The Vitz mini hatchback was launched in May with a special, limited introductory Kinto One offer of R2,999 per month for 12 months with a maximum mileage of 18,000km.

A Kinto One contract on a Toyota Starlet 1.5 Xi starts from R4,884 for a 60-month, 60,000km contract. The same car on a regular instalment sale — where you get to own the vehicle at the end — at the 11.75% prime lending rate would cost R5,671 a month over the same period, minus insurance.

A Hilux 2.8 GD6 double cab Raider is R11,004 on Kinto One (60-month, 60,000km), compared with R16,777 on a standard instalment sale.

Another example is a Corolla Cross 1.8Xi CVT at R7,115 per month on Kinto One, compared to R9,128.

These are significant savings, and more so when the cost of insurance is added to a standard instalment sale. Of course, not owning the car is a drawback and you have nothing to trade in, but Kinto One sells the idea of providing access to the latest vehicles without the burden of owning a depreciating asset.

“The fact that customers don’t get to own the vehicle has been one of our challenges, but part of our marketing is to educate consumers on the lower total monthly cost of the service,” says Thompson.

“The benefit of Kinto One is its flexibility. You’re not committed to a certain vehicle and the shortest contract is six months. A subscription could make sense if you only need the car for a limited time,” he says.

Thompson says SA is the fastest-growing Kinto One business globally with a subscriber base in the thousands. The service is available in 25 countries with over 200,000 contracts signed globally since its 2019 launch.

About 90% of Kinto One customers are fleet buyers, while among private buyers there is great traction among the youth. 

“Younger buyers are rather spending their money on holidays and experiences than having a car parked in the garage,” says Thompson.

Kinto One is available on new vehicles for now but the next offering will be a Second Life lease on used Kinto One vehicles, to be introduced within the next two years.

droppad@arena.africa