What is the novated lease model?
A novated lease is a three-way agreement where an employee leases a car, and their employer makes payments and covers running costs from the employee’s pre-tax salary. This salary sacrifice mechanism reduces taxable income, offering significant tax benefits and simplifying vehicle budgeting for employees
Novated leases are becoming more accessible with more Australians employers adding it to their benefits package. However, because the model is centred around cost savings, it often results in employees having to compromise with cars that don’t suit their needs and hold the estimated value from the start of the agreement. Many premium EVs novated lesses have been hit by steep price drops over the last two years which forced them into negative equity.
Novated leases are often all-inclusive and cover the cost of maintenance, registration, insurance and service. However, most novated providers charge steep management fees and early termination fees that can quickly make novated car plans expensive.
Considering a novated lease?
Why choose a car subscription over a novated lease?
- You’re in control
Unlike a novated lease which is a three-way agreement between you, your employer and the novated lease provider, a car subscription with Karmo is just between you and Karmo. By keeping your employer and car plan separate, you have the ultimate control over both your car plan and career. Based on where life takes you, you are free to swap both your job and your car without any awkward paperwork.
- No looming residual payment
Unlike novated leases, in a car subscription you aren’t required to own the car you’re in by paying a hefty residual payment at the end of the term. With most manufacturers aggressively cutting prices, most novated lessees after paying a high residual amount are faced with negative equity and forced to cut their losses in the used car market. A car subscription’s fixed weekly fees mitigates your financial risks and ensures your capital and savings are secure.
- Avoid long-term commitments
Most novated leases require a minimum term of at least two years and don’t offer a swap before the end of the minimum term. Car subscriptions with Karmo start from just 4 months. This gives you the opportunity to try out a car and make adjustments to your car plan with every term. You’re not tied down to a single car and drive a car that suits your needs at every stage of your life.
- No hidden costs
Novated leases promise tax savings but often have hidden costs such as administration fees, ongoing management fees and high early termination fees. This can make your car access costs significantly higher than what you’ve budgeted for. A car subscription bundles the cost of the car, maintenance, insurance, rego and roadside assistance into one single transparent fee which ensures you never have any unexpected car costs. Novated leases provide a pathway to eventually own the car but since the residual value you are required to pay is calculated based on the car’s initial value, most novated lessees lose money because of the increased depreciation the automotive market is witnessing now.
Why Choose Karmo as your novated lease alternative
- Trusted by customers
Karmo is Australia’s largest car subscription service. In 2024, our customers travelled over 60 million kilometres. With over 1000 5 star reviews on Google, Karmo is committed to making your car subscription as convenient as possible. Our easy no credit check application and one simple weekly fee model ensures complete transparency every step of the way.
- Car access made easy
At Karmo we aren’t just another lease provider, we’re reimagining what it means to own a car by simplifying access to new and reliable cars. By partnering with over 130 dealers across Australia we’re helping thousands of Australians skip long waitlists and drive a car of their choice today.
- Specialist teams that care.
We have dedicated teams in Melbourne, Sydney, Adelaide, Brisbane and Perth that are available to assist every step of the way. Unlike leases and rentals, our car subscription model has the customer at the centre and not the car. This ensures great customer experience throughout your subscription journey.
Karmo vs Other subscriptions vs Novated leases
Karmo car subscriptions, other subscriptions and novated leases both offer car plans. Compared to novated leases Karmo has no joining fees or swap fees and offers significantly more flexibility. Karmo car subscription is all-inclusive, flexible and transparent, making it an excellent choice for salaried employees looking for simplified and affordable car access.
Features
Other Subscriptions
Rent to own
New cars
No application, sign up or swap fees
No credit check
Fuel
Registration & Insurance
Maintenance & servicing
No long-term commitment
No hidden costs
Features
Other Subscriptions
Leasing
New cars
No application, sign up or swap fees
No long-term contracts
New car rotation
Registration
Maintenance & servicing
Insurance
No hidden costs
12,000+ satisfied drivers on the road
Here’s what our customers say about Karmo car subscriptions.
What do we mean by all-inclusive?
New car experience
The cost of your vehicle is included. Karmo ensures that our vehicles are always new, with mileage limited to 15,000km, providing you with a permanent new car experience.
Vehicle registration
Karmo takes care of all the necessary paperwork and registration costs ensuring that each car is properly registered.
Maintenance & servicing
All servicing, maintenance and tyre costs are covered by Karmo, ensuring that your vehicle remains in optimal condition and saving you money.
Roadside assistance
Karmo offers 24/7 roadside assistance, ensuring that help is just a phone call away in case of emergencies.
Vehicle insurance
Full insurance coverage is included, providing you with financial protection in the event of an accident or damage.
Flexible plans
No more 3 year contracts! You can sign up for the duration you need and have the option to stop or swap at the end of your plan, providing you with flexibility and freedom from lengthy commitments.
Generous mileage
Karmo’s car subscription plans include a generous allowance per week of driving. Any overages are simply charged per KM.
Less fees & no hidden costs
Unlike competitors, Karmo won’t charge you for choosing us! At Karmo you will enjoy zero application, signup and swap fees, making it more accessible and cost-effective compared to other providers.
No long-term commitments
We believe a car subscription service should be just as flexible as any other subscription service. That’s why we provide our drivers a convenient cancellation policy.
New car experience
Vehicle registration
Maintenance & servicing
Roadside assistance
Vehicle insurance
Flexible plans
Generous mileage
Less fees & no hidden costs
No long-term commitments
What do we mean by all-inclusive?
New car experience
New car experience
The cost of your vehicle is included. Karmo ensures that our vehicles are always new, with mileage limited to 15,000km, providing you with a permanent new car experience.
Vehicle registration
Vehicle registration
Karmo takes care of all the necessary paperwork and registration costs ensuring that each car is properly registered.
Maintenance & servicing
Maintenance & servicing
All servicing, maintenance and tyre costs are covered by Karmo, ensuring that your vehicle remains in optimal condition and saving you money.
Roadside assistance
Roadside assistance
Karmo offers 24/7 roadside assistance, ensuring that help is just a phone call away in case of emergencies.
Vehicle insurance
Vehicle insurance
Full insurance coverage is included, providing you with financial protection in the event of an accident or damage.
Flexible plans
Flexible plans
No more 3 year contracts! You can sign up for the duration you need and have the option to stop or swap at the end of your plan, providing you with flexibility and freedom from lengthy commitments.
Generous mileage
Generous mileage
Karmo’s car subscription plans include a generous allowance per week of driving. Any overages are simply charged per KM.
Less fees & no hidden costs
Less fees & no hidden costs
Unlike competitors, Karmo won’t charge you for choosing us! At Karmo you will enjoy zero application, signup and swap fees, making it more accessible and cost-effective compared to other providers.
No long-term commitments
No long-term commitments
We believe a car subscription service should be just as flexible as any other subscription service. That’s why we provide our drivers a convenient cancellation policy.
Apply for Karmo's car subscription service
Karmo’s car subscription application process is quick and easy, just like a car subscription service should be. With no credit checks or finance required, the application can be completed in under 5 minutes with the added bonus of accessing pre-approval instantly. With no application fees and a convenient cancelation policy, you can subscribe to your dream car risk free with Karmo.
- Apply in minutes
With no credit checks or finance required, the application can be completed in under 5 minutes with the added bonus of accessing pre-approval instantly.
- We get in touch
Your preferred hub will contact you to find a suitable car and subscription plan for your needs.
- Drive away, within a day
If your car is in stock, you can drive away the same day and begin your subscription journey!
- 5 min to complete
Need a hand?
We’re here to help! If you have questions or need advice, you can easily reach out to us via email or give us a call. Prefer to find answers on your own? Check out our FAQs for quick solutions and helpful tips. Whatever you need, don’t hesitate to contact us—we’re ready to support you every step of the way.
Can I cancel my Karmo subscription anytime?
Karmo’s car subscription is flexible, ensuring you’re not tied to a car that doesn’t suit your needs. Once you complete your minimum term you can cancel your car subscription with a 30-day notice. You will need to provide the 30-day notice by emailing info@karmo.co.
How much does a Karmo car subscription cost?
Karmo has a wide range of vehicles to suit your needs and you can find which vehicles are available near you by visiting https://karmo.co/inventory-subscription/
Managing toll payments for your Karmo subscription vehicle
Karmo’s terms and conditions require that tolls be paid directly to the toll operator. This helps keep variable weekly costs to a minimum and help our customers budget for their subscriptions with ease. To make it easier for you, we strongly recommend fitting a toll tag to your vehicle, otherwise an administration processing fee of $5 is applicable to any unpaid tolls that we receive on behalf of your vehicle. In such cases, you will be charged the unpaid toll charges and the administration processing fee on your next weekly payment.
Who is covered by Karmo provided insurance in my subscription car?
To ensure compliance with our insurance policy, it’s important to note that coverage is limited to the person listed on the contract, as well as any additional drivers who are explicitly mentioned on the subscription agreement.
This means that only the primary subscriber and any additional drivers specifically listed on the contract will be covered by our insurance policy during the subscription period. It is essential to adhere to this requirement for the protection and safety of all parties involved.
Please remember that driving without the appropriate coverage may result in liability and potential financial risks. The safety and security of our subscribers remains a priority and we provide comprehensive insurance coverage as per our policy guidelines.
What is included in a Karmo car subscription plan?
At Karmo, we take pride in offering comprehensive car subscription plans that cover a number of services and expenses related to your vehicle. Our subscription plans include:
- Cost of the Car: The subscription fee covers the cost of the vehicle itself, allowing you to enjoy driving without the burden of car ownership.
- Registration Fees: We handle the registration fees associated with the vehicle, ensuring that it remains legally compliant throughout your subscription period.
- Roadside Assistance: Our car subscription plans include roadside assistance services, providing you with peace of mind in case of any unexpected breakdowns or emergencies on the road.
- Damage Cover: We provide damage coverage for the subscribed vehicle, safeguarding you against potential damage and accidents.
- Servicing and Maintenance: Servicing and maintenance of the vehicle are included in the subscription plan, ensuring its optimal performance and reliability.
By bundling these services and expenses together, we aim to offer a hassle-free and all-inclusive car subscription experience.
Is fuel or charging included in a Karmo car subscription plan?
Fuel and charging expenses remain the responsibility of the subscriber. This means that you will need to bear the costs associated with refuelling or charging the vehicle during your subscription period.
Frequently Asked Questions
Karmo’s all-inclusive car subscription model, unlike other subscriptions, only provides new cars with the option of upgrading or swapping to a new car every four months.