Buying a Car Versus Renting one in Singapore

According to the Economist Intelligence Unit’s Worldwide cost of Living index, Singapore is one of the most expensive city to live in the world.

The EIU’s Worldwide Cost of Living Survey is designed to help human resource and finance managers calculate cost-of-living allowances and build compensation packages for expatriates and business travellers, and does not reflect the cost of living of Singaporean households.

Despite some perks to domestic life in Singapore – home help is cheap – the city “remains the most expensive place in the world to buy and run a car”, EIU said.

Singapore has avoided Asia’s massive traffic jams by controlling vehicle ownership through a quota system under which a buyer must pay for a Certificate of Entitlement – currently nearly S$40,000 – on top of the vehicle’s actual price. That means a basic sedan comes with a S$100,000 price tag. Car Rental in Singapore therefore becomes a popular option.

Below are some of the pros and cons of buying a car versus renting one in Singapore :

1) What are the upfront costs?

Buying A Car On Finance – At least 50% of the car’s purchase price as down-payment. The remaining 50% may be repaid over 3 to 7 years.

Renting a car – Usually a low deposit, depending on duration of rental; fully refundable.

2) How do the monthly payments compare?

Buying A Car On Finance – The monthly payments depends on the amount + interests being financed.

Renting a car – The monthly rental cost depends on the make, model and year of the car.

3) Who owns the car?

Buying A Car On Finance – You own the car as long as you keep up the instalments, and you get to keep it after the financing terms.

Renting a car – The Rental Company owns the car. You pay to use it, but at the end of the rental period, you must return it.

4) Who pays for road tax, servicing, inspections, spare parts, wear & tear, insurance and so on?

Buying A Car On Finance – You do.

Renting a car – The Rental Company does. But these costs are built into your monthly lease payments.

5) Why should I keep the car in good condition?

Buying A Car On Finance – Because it will affect the resale value later on.

Renting a car – Because the Rental Company may charge you for damage beyond what they consider normal wear and tear.

6) How do I get rid of the car later?

Buying A Car On Finance – You sell, scrap or trade the car in.

Renting a car – At the end of the rental period, you hand the keys back to the rental firm.

7) What if I get sick of the car and want to switch?

Buying A Car On Finance – You must first settle the outstanding loan amount with the finance company, if you intend to sell, scrap or trade in the car. Some finance companies impose a penalty charge for early settlement.

Renting a car – You can easily return the existing car and rent another one if there is no contract.

8) What about the car’s future value?

Buying A Car On Finance – You bear the risk regarding the car’s remaining value when you sell or trade in.

Renting a car – The Rental Company bears the risk of depreciation.

 

For hassle-free Car rental in Singapore, Car hire or Car leasing in Singapore, you can email us at : johnny@exclusivelimo.com.sg , or place a call to us on (+65) 62850020.

Website : www.exclusivelimo.com.sg