A car service plan subscription spreads the cost of scheduled servicing into a monthly fee, usually covering one or two services a year, a safety check and member perks like a loan car or a parts discount. Manufacturers sell prepaid versions: Kia's prepaid EV3 plan is A$695 for three services. Independent mechanics can offer monthly plans that lock in customers between services and win the repair work.
Key takeaways
- Car subscriptions largely stalled: Volvo suspended Care by Volvo in the US in August 2024 because the provider carries depreciation and early-return risk.
- Subscriptions for the service around an asset are usually better business than subscriptions for the asset itself.
- Manufacturer prepaid plans are tied to the vehicle and lock in today's prices. That's the offer independents must answer.
- In Australia, servicing by an independent mechanic doesn't void a new car warranty if it's done to the manufacturer's specifications.
In The Subscription Playbook, I wrote that "Jaguar offers their cars on subscription starting at around $1,000 per month, including registration, insurance, and maintenance."
It sounded like the future.
It wasn't.
Volvo, the poster child for car subscriptions, suspended Care by Volvo in the US on 1 August 2024 "for the foreseeable future," and halted it in Europe too. Dealers reported a subscription was as much work as a normal sale. Jaguar stopped selling most new cars while it reinvents itself as an all-electric brand. The car subscriptions case study has the full story.
Why did it fail? Because the provider carries the depreciation, the insurance, the repairs and the risk of the car coming back early. Unless the car is used heavily and the term is long, the margin disappears.
Here's the lesson I took from it, and it's good news for mechanics: subscriptions for the service around an asset are often better business than subscriptions for the asset itself.
Nobody wants to carry the depreciation on a customer's car. But servicing it twice a year, keeping it safe and being the first call when something goes wrong? That's a subscription a workshop can run profitably.
What do car service subscriptions look like now?
The carmakers have already moved into this space, which tells you there's money in it.
Take Kia Australia. Owners of its electric vehicles can prepay three, five or seven scheduled services. For the EV3, that's A$695 for three services, A$1,320 for five and A$1,946 for seven, including GST (prices current at publication and subject to change). Kia's pitch is simple: "you won't pay more if the cost of labour and parts increases." The plan is tied to the vehicle, can be used by the next owner if the car is sold, covers standard scheduled services only, and must be bought within the first 11 months of ownership.
That's a classic prepaid plan. It brings cash forward, locks the customer into the dealer network and protects them from price rises.
For an independent workshop, it's a warning. Every customer who buys a dealer's prepaid plan is a customer you won't see for years.
The answer isn't to give up. It's to offer something the dealer doesn't: a plan that covers older cars, follows the driver to their next vehicle and comes with a mechanic who knows their name.
Which subscription models fit a workshop?
Of the book's eight subscription models, four fit naturally.
| Model | How it looks in a workshop | Fit |
|---|---|---|
| Bundled Services | Logbook services plus a mid-year safety check, tire rotation and fluids top-up | Core of the plan |
| Insurance | Priority booking, a loan car, a breakdown call-out, free pre-trip checks | Strong. Cheap to give, valued highly |
| Member Benefits | 10% to 15% off parts, tires and batteries | Strong. Drives repair work your way |
| Minimum Commitment | Prepaid services, or 12-month fleet agreements | Good for fleets and new-car buyers |
The bundled services model is the foundation. People already buy servicing. You're packaging it, smoothing the cost and adding perks that keep them loyal between visits.
What does a 3-tier service plan look like?
Here's an illustrative offer for an Australian independent workshop. Prices include GST.
| Service Saver | Driver Plus | Family Fleet | |
|---|---|---|---|
| Monthly price (illustrative) | A$29 | A$45 | A$79 |
| Vehicles | One | One | Two |
| Scheduled servicing | One logbook service a year | One logbook service plus a mid-year check and tire rotation | Driver Plus for both cars |
| Perks | Priority booking, free pre-trip safety check | Free loan car on service days, pickup within 5 km | Loan car, pickup and drop-off, one breakdown call-out a year |
| Repair discount | 10% off parts | 15% off parts and tires | 15% off parts and tires |
| Transferable to next car | Yes, repriced | Yes, repriced | Yes, repriced |
| Term | Month to month | Month to month or 12 months | 12 months |
A plan priced at A$45 a month is A$540 a year. Many customers already spend that on a service and a set of small repairs, so the plan feels like budgeting rather than a new cost.
Price a service plan that pays
Enter your labor rate, parts costs and visit schedule, and the free Subscription Price Calculator works out a monthly fee that covers GST and fees.
How do you work out if a service plan is profitable?
Let's cost the Driver Plus plan.
Worked example: Driver Plus at A$45 a month
Annual price: A$540, including GST. Excluding GST: A$490.91.
Annual costs: - Logbook service labor, 2 hours at a loaded A$70 an hour: A$140.00 - Oil, filters and service parts: A$95.00 - Mid-year check and tire rotation, 0.75 hours: A$52.50 - Loan car running costs for two visits: A$15.00 - Card and billing fees at about 2%: A$10.80
Plan contribution: A$177.61 a year per member.
Repair work: if the average member spends A$900 a year on repairs and tires (including GST) and your gross margin after the member discount is 40%, that's another A$327.27 a year.
Total: about A$505 a year per member.
The plan covers its own costs with room to spare. The repair work is where the real money sits, and it's the work you lose when a customer drifts to the dealer or a chain.
Annual member value = (Annual fee ÷ 1.1) − service labor − service parts − perk costs − payment fees + repair margin
Test your own labor rates and parts costs in the Subscription Price Calculator. Then use the LTV calculator to see what a member who stays five years is worth, and the Subscription vs One-off Profit Calculator to model the cash flow change.
Subscription vs One-off Profit CalculatorSee how switching to subscription changes revenue, cash flow and valuation.Open the free tool →How do you launch a service plan in your workshop?
- Segment your customers. Who has had two or more services with you in the last two years? Start there.
- Price by vehicle type. A four-cylinder hatch and a turbo-diesel dual cab cost very different amounts to service. Use two or three price bands.
- Decide your exclusions: tires, brakes, batteries, wear-and-tear repairs. Offer a member discount instead.
- Make it transferable to the member's next car, with repricing. That's your edge over vehicle-tied dealer plans.
- Pitch it at pickup. The customer has just paid for a service. Show what the same year would cost on the plan.
- Automate reminders. Book members in for their next service before they leave.
- Track repair revenue per member separately. If members spend more on repairs than casual customers, the plan is doing its job.
What are the pitfalls?
Unlimited anything. "Unlimited oil changes" or "all repairs included" are open-ended promises a workshop can't afford. Cap everything.
Pricing one plan for every car. European performance cars and small hatchbacks don't belong in the same price band.
Sounding like insurance. If your plan promises to pay for breakdowns or major repairs, it starts to look like an extended warranty or insurance product, which can need a license. Keep it to your own scheduled services, priority and discounts.
Forgetting the customer who sells the car. If the plan just ends, you lose them. Make transfer easy.
Over-servicing to justify the fee. Recommending unnecessary work erodes the trust a plan depends on. Members should feel the plan saves them money and worry.
What do Australian mechanics need to know?
As at October 2026, here's the short version. It's general information, so get advice on your own terms.
Warranty myths. The ACCC says having a new car serviced by an independent mechanic doesn't void the manufacturer's warranty, as long as the work is done to the manufacturer's specifications with appropriate parts. That's the line to use when customers worry about leaving the dealer. Australia's motor vehicle service and repair information sharing scheme, which began in 2022, also requires carmakers to make repair information available to independent repairers.
Consumer guarantees. Under the Australian Consumer Law, your work must be done with due care and skill whether or not the customer is on a plan. Don't imply a plan buys rights the law already gives them.
Subscription rules from 1 July 2027. Monthly or auto-renewing service plans are likely to be subscription contracts under the Unfair Trading Practices Act 2026. You'll need upfront disclosure, prescribed reminders and an easy way to cancel, online if customers join online. The subscription trap laws guide covers the detail.
GST and prepayments. Prepaid services are income received in advance until delivered. If a customer prepays three years of servicing, you owe those services, and you need the cash to deliver them. The GST on subscriptions guide explains the timing.
The accountant's angle: steadier cash flow and a more valuable workshop
A workshop's revenue tends to follow the calendar: busy before Christmas and Easter road trips, quieter in between. A base of 300 members on A$45 a month adds A$13,500 of predictable revenue every month and gives you a booked-in pipeline of services.
It also changes the business on paper. A buyer looking at a workshop wants to know how many customers will keep coming back after the owner leaves. Active service plans with renewal history answer that question with evidence instead of a handshake.
Free Subscription Profit Review
Australian business owners can book a free 30-minute review with a BPAG Accountants adviser. An honest conversation about:
- whether a subscription model could work for your business
- how recurring revenue could cover your fixed costs each month
- how it could lift what your business is worth
No cost, no obligation. General information only until we understand your situation.
What to do next
Pull your customer list and count how many customers have serviced with you at least twice. Then price one plan for one vehicle band and offer it to every customer at pickup for the next three months.
If you run a detailing bay or car wash too, the car wash membership playbook shows when "unlimited" works. And for more industries, see all industry playbooks.
Frequently asked questions
Is a prepaid car service plan worth it?
For the driver, it fixes the price of scheduled services and protects against rising labor and parts costs, as Kia's prepaid plan puts it. The trade-offs are that the money is paid upfront, plans are usually tied to the vehicle, and unused services may not be refunded if the car is sold or written off. Always read the terms on transfers and refunds.
How is a monthly plan different from capped price servicing?
Capped price servicing sets a maximum price for each scheduled service, but you still pay at each visit. A prepaid plan collects the money upfront for a set number of services. A monthly subscription spreads the cost evenly and usually adds perks, such as a safety check, loan car or parts discount. For a workshop, the monthly plan creates the most regular contact with the customer.
Can I offer a service plan for fleets and tradies?
Yes, and it's often the best place to start. Small fleets value predictable costs, priority booking and minimal downtime more than a discount. Price per vehicle per month, include a loan vehicle or pickup and drop-off, and set a 12-month term. In Australia, small business customers on standard contracts are covered by the new subscription rules from July 2027.
What should a mechanic's service plan exclude?
Exclude wear-and-tear repairs, tires, brakes, batteries and anything outside the scheduled service, then offer a member discount on them instead. Kia's prepaid plan, for example, covers standard scheduled services only, not wear-and-tear repairs or extra maintenance a dealer recommends. Clear exclusions prevent arguments at the counter.
How do I stop members leaving when they sell the car?
Make the plan transferable to the member's next vehicle, with a repricing based on the new car's service schedule. That turns a car sale from a cancellation point into a reason to stay. Manufacturer plans are usually tied to the vehicle, so a plan that follows the driver is a genuine point of difference for an independent workshop.
General information only, current as at October 2026. It isn't legal, tax or financial advice and doesn't consider your circumstances. Speak to a qualified adviser before acting.
Talk it through with a BPAG adviser
Free for Australian business owners: a 30-minute Subscription Profit Review on whether a subscription suits your business.
Robert Coorey, MBA
Robert is the author of The Subscription Playbook and Feed a Starving Crowd and a Director at BPAG Accountants in Sydney. More about Robert.
Sources
- Kia Australia: Prepaid servicing
- Kelley Blue Book: Volvo kills its car subscription (2024)
- Automotive News: Volvo quits the car subscription business (2024)
- ACCC: Warranties
- Competition and Consumer Amendment (Unfair Trading Practices) Act 2026 (No. 64, 2026)
Facts and prices checked 27 October 2026. Spotted something out of date? Tell us.