While owning a car in Singapore may be costly, it empowers greater convenience when commuting. If you are considering getting a car, here is one important question you should ask yourself – do you have the financial capability to own a car or if you should just opt for car leasing in Singapore?
But, before we dive deeper into the differences between owning and leasing, let’s first understand what car leasing is exactly. When you lease a car in Singapore, you are paying to drive a car based on an agreed-upon amount of time and miles, instead of the full price of the car. You will be charged monthly based on the car’s projected depreciation value over the course of the lease term.
With Hertz Singapore, you can choose to lease a car without worrying about long-term monetary commitment, making it a perfect choice for expats and business travellers. You can choose to lease it for 18 to 60 months under the LITE package or 3-7 years under the COMPREHENSIVE package.
For example, when you lease a BMW X3 sDrive on Hertz, you do not have to worry about the finances that you would have to fork out for car loans, interest rates, car insurance or even road tax. Compared to buying where you would have to pay approximately $6,500 per month, your overall monthly charges when you lease this car would only be approximately $4,500. In total, you get to save up to $2,000 a month which is quite a substantial amount, especially if you are in a tight financial situation.
*The rates stated here are in Singapore dollars and the total amount is accurate as of November 2022.
Now, owning a car and leasing a car come with their own set of factors to ponder over including upfront costs, car insurance, road tax and the cost to maintain the car. Depending on your budget situation, buying a car and leasing a car have their own pros and cons. So, let’s find out which scenario suits you best!
|Buying A Car||Leasing A Car|
|Advantages||You Get Full Ownership Of The Car|
Purchasing a car means getting full ownership over the car and your finances. You never have to worry about mileage restrictions or possible additional charges that might come up such as addressing the wear and tear of the car. You also have complete control over how you want to personalise and improve your car based on your budget, needs and wants.
Since a car is a long-term purchase, most buy one with the intention of an extended period of ownership. If you are planning to move out of the country within the next few years, then car leasing in Singapore is highly advantageous for you as most cars come with a customisable leasing term.
|You Get To Apply For A Car Loan|
Based on your budget and the car’s overall price, you will be able to get a loan, either from a bank or an in-house financing company to ease your financial situation. You will also have the option to refinance your car loan if you ever find yourself in circumstances where your finances are not enough to settle your monthly repayments.
You need not worry about insurance, road tax or servicing the car as well during your lease period as all these costs are covered by the lease provider. At the end of your leasing period, you will also be presented with an option to purchase the car at an agreed price under the lease-to-own package. Or you can even extend your lease period with long-term car leasing packages.
In the first 3 to 5 years of ownership, new cars are known to lose over 15 – 25% of their value. So, if you consider your car as a financial investment, then this is a disadvantage. Should you wish to trade in or sell your car in the future, the total price of your car will be based on its huge depreciation value and other factors.
Most cars come with leases that limit the number of miles you can drive but this is subject to the type of leasing package that is chosen. Some packages are all-inclusive while other packages would have a cap at 20k mileage per year. If this is something that worries you, fret not as the average mileage of a car in Singapore for a year is 17,500km to 20,000km.
|Long-Term Maintenance Cost|
When purchasing a car, the upfront price is not the only thing you have to budget into your finances. You would also have to factor in the maintenance costs needed for safer and smoother drives. Although you might have a warranty that would cover your maintenance cost, you’ll be fully responsible for maintaining your car once that expires.
|Maintenance for Wear and Tear|
Customers will need to be liable for the maintenance fee for wear and tear under the Lease To Own Scheme.
Whereas for Comprehensive Lease, maintenance is covered with a replacement car.
So, Should You Lease A Car In Singapore?
Here are some questions you can ask yourself to help you decide whether you should lease or own a car.
1. Do you need a car urgently?
Thanks to the convenience of the public transportation system in Singapore, moving around this island is quite convenient. But if you need a car for your short-term stay in Singapore, or you simply need to get around town to meet clients without wanting to commit to a long-term loan, leasing a car would be the best option for you.
2. Is it financially wise to lease a car?
Thanks to the low upfront cost and the lower monthly payment, it is better to lease a car than to own one if you are not financially stable or in need of a car for a short period of time.
In the end, it all boils down to your needs and wants in a car. If you are a car enthusiast with lots of personalisation ideas, buying a car would be the best option for you. But, if you are in the country only for a short period of time and do not want to bother with the nitty gritty documentation that comes with owning a car, leasing makes for the better choice.
At Hertz Singapore, apart from the wide selection of cars, the process of applying for a lease is far simpler as compared to buying a car because of all our all-inclusive plans available. To know more about our packages, do not hesitate to contact us today!