It is not a secret that owning a car in Singapore is ridiculously expensive, leaving many with taxis, public transport, or Grab. The debate on whether it makes financial sense to buy a car in Singapore or rent has been on the rise recently, considering the rise in the cost of purchasing and maintaining a car. Car prices in Singapore are compounded by the purchase price, administrative costs by the Land Transport Authority (LTA), the upfront deposit, and car ownership taxes.
Source: Serano
Other Factors Contributing to the Cost of Buying a Car
The LTA’s regulations and taxes are intended to reduce the number of cars on Singapore’s roads by making it costly to own a car. This also helps in enhancing traffic flow and reduces pollution levels in the country. Apart from the taxes, car costs are also affected by factors, such as Certificate of Entitlement (CEO), a certificate allowing car owners to drive in Singapore, Vehicle Emission Scheme (VES), and the local dealers’ margin. Since buying a car in cash is highly unlikely, you could also take an auto loan to finance the car cost and contend with monthly instalments plus accompanying interests. Apart from these costs, there are also regular expenses like petrol, road tax, parking fee, ERPs, maintenance and service costs, and insurance premium to contend with.
The Difference between Car Rental and Car Leasing
While comparing buying a car with renting one, it is important not to confuse car rental and car leasing. Car rental and car lease have different financial arrangements, commitments, and user expectations. One major difference is the duration of usage, with a rented car taking a shorter duration of time from hours to weeks, while a car lease takes a long-term commitment of years. In this article, we compare car rental and car-buying decisions.
Should I Rent a Car in Singapore?
During the pandemic, many have adopted work from home policy, meaning travel has been limited to a few days in a week. Therefore, many are considering car rental rather than incur the exorbitant cost of owning a rarely used car. So, what is car rental? This is a process in which you hire a car from a company owning the car at a fee for hours or days. Although public transportation in Singapore can take virtually everywhere in the country, you can rent a car for business purposes, convenience, or enjoying a drive at an affordable cost.
In Singapore, car rental prices differ significantly depending on the company, the car model, and the rental duration. Nevertheless, it is cheaper than buying a car and offers you a variety of benefits. Renting a car makes more economic sense now that the majority work from home and rarely use their automobile.
Car Renting Prices in Singapore
Car rental is convenient for individuals looking for short-term motoring, such as a weekend drive or a short blast to Malaysia. It is the ideal option if you need a car for rare occasions, allowing you to get behind the wheel while paying for a few days that you will use the car.
Various car rental companies in Singapore charge different rates depending on the duration of hire. For example, Shariot charges per hour with varying hourly rates depending on peak time and car model you hire. Shariot saver could cost you as low as $1 per hour during supper off-peak and Shariot plus costing $4.5 per hour.
Benefits of Renting
Though renting a car has its challenges, like using the car for only a select few days and lose the flexibility to drive wherever you want, as with your car, it has its advantages.
- With car rental, there is no upfront deposit, often required when buying a car. It means that you won’t need a loan to finance a rental car since the cost is often cheap, thus avoiding interest expense from auto loans. You could use the saved money for other purposes like financing home loans.
- You will also avoid maintenance works associated with owning a car, including road tax renewals, regular servicing, vehicle inspections, as the car hire company bears these costs.
- Other costs you will not pay are insurance premiums, cost of purchase, additional registration fees, and CEO certificates, which the rental company would have covered.
- Renting a car also gives the freedom to use different car models according to your business needs, which is difficult to attain with car ownership. It also allows you the opportunity to drive premium models that would otherwise be very expensive to own.
However, you will need to bear petrol and parking costs whenever you use a rental car. Most rental car companies require that the hirer collects the car from the yard, while others bring it to you at an added cost. There is also a security deposit before taking the car for a ride, with the expectation that you will return it in good shape.
Should You Still Buy a Car if Circumstance Necessitate
There are certain circumstances when a car could be helpful, such as when your kids cannot sit still on a train, or you are working as a sales representative, requiring that you traverse the Island several times.
If you take an example of Toyota Corolla Altis, financed through a loan while paying insurance, road tax, and maintenance will set you an estimated cost of $937.5. This amount is enough for paying rental car for eight or nine days monthly, meaning that if you don’t use the car often, renting a car will be profitable.
The flexibility and adaptability of using a rental car are encouragement for choosing the method. You can rent a small car when driving alone and use a spacious MPV for the weekend trip with family and friends.
Conclusion
Buying a car in Singapore is rather complex and expensive. You have to bear high purchase costs, many taxes, maintenance costs, insurance costs, and other miscellaneous expenses associated with owning a car. The Certificate of Entitlement (CEO) is also another barrier to buying a car as Singapore intends to reduce overcrowding and pollution on the Island. However, Car rental companies, such as Shariot, are here to meet your need for accessibility and convenience, enabling get wherever you want at an affordable price. With the Shariot App, you can request car rental services from your palm and choose which platform best fits your need and that of the family.
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