With the high cost of living in Singapore, you may be wondering if owning a car is a practical thing to do. For instance, the Motor Vehicle Financing policy by the Monetary Authority of Singapore (MAS) requires car buyers to settle 40 percent of the total cost of the vehicle for the down payment. Then, there is the Certificate of Entitlement that needs to be processed, along with other expenses that come with a car purchase. Thus, the question remains – should you buy your own or simply check out reputable long term car rental services in Singapore has to offer to meet your tight budget?
It may be worth looking into the benefits and drawbacks that come with car rental services business before you decide to take a plunge into either buying a car or renting a car. This way, you will be guided on the best plan of action to take to address your transportation needs.
Buying Vs. Renting a Car
Let us begin with the things to expect when you purchase a car in Singapore. If you wish to buy a standard sedan at under $20,000, you will need to consider the paperwork that comes with it. The registration fee is at $140, then there is the Additional Registration Fee (ARF) to pay afterwards. For a $17,000 sedan, the ARF is around $12,300. Which means when you add that amount to the value of the car, the overall cost is at $29,740. But this is yet to include the price for the COE. It is important that you secure the COE as it entitles you to vehicle ownership, as well as road usage for a decade. To obtain the COE, a bidding process takes place. We can just say that the possible COE for a standard sedan at this price will be about $51,890. Now, adding that to the previous figures, your car is now worth $81,630. But it does not stop there.
After you pay for all those expenses, there is the Excise Duty or Customs Duty to be settled. It may be at least $3,460 for a sedan, which now brings your vehicle’s worth to $85,090. Include the dealer’s cut to that price (generally about 10 percent of the selling price of the vehicle), along with the 7 percent GST in Singapore, and you will be surprised to find the car’s price tag at $100,150 in showrooms. How about renting a car in Singapore? You will be pleased to know that it does not get complicated at all when you go to a rent a car Singapore office – and you could walk away paying much less than you would as when you purchase your own vehicle. In fact, there are only a few steps involved when you rent a car in the country. First, you should call rental companies for your enquiries, then schedule an appointment for a test drive of your preferred vehicle, sign the contract, then settle a payment for it upfront. You may even drive the vehicle off immediately upon signing the contract unless the company needs to buy a new car for you to use. Otherwise, you are ready to roll right then and there!
As for the price of renting from a corporate car rental company, it may be at around $3,900 for a standard sedan, although the price depends on the model and make of the vehicle. But the upfront fee already includes the first month car rental, as well as 1 month deposit and the 7 percent GST.
Upkeep and Maintenance Concerns
Now, there is another issue that comes in mind when you buy or rent a car in Singapore – the upkeep and maintenance aspect of having a vehicle. If you take out a car loan to buy a sedan, the monthly instalment may be at $997 for a $70,000 loan. In addition to the loan instalment payments, you will also have to think about the annual car insurance that may ring up the bill to $2,100. (per year). With the $682 annual road tax added to the cost, the upkeep per month for a car ownership in Singapore is a whopping $1,300 or more.
But when you rent a vehicle, car insurance or even road tax are not even any of your concern. These are all included to the package offered by most car rental companies in the country. Thus, there is no additional cost once you have settled the upfront payment. Of course, there are other expenses you need to shoulder whether you buy or rent a car and these include the parking charges, ERP, and petrol. Overall, renting is still cheaper in terms of the upkeep expenses.
Now let us head over to the maintenance. This is where buying and owning a car become a bit of a headache sometimes because of a number of things to think about including replacements or purchase of new parts and repairs. The routine checks and maintenance that is good for 5 years should be at around $5,840. While other car owners decide to skimp and go cheap on car servicing, this is not exactly a smart move because of the possibility of causing damages to your vehicle – and this further hikes up the bill. Thus, a well-maintained car can save you from serious troubles and even more expenses in the future.
When you rent a car, maintenance is generally free as this is included in the package. If there are worn out or damaged parts, the replacement costs are also shouldered by the rental company. You may even contact the 24/7 road assistance by most car rental companies in Singapore to get an immediate support when your vehicle breaks down unexpectedly. Hence, driving a rental car is seamless and stress-free.
Changing Your Car More Often
Are you tired of your present car? If you own it, then there is a slimmer chance for you to simply replace the car as you wish. After all, you have to keep paying your loan instalment fees, so you are basically stuck with your car even if you feel like replacing it with a different one. This is the practical thing to do when you have a strict budget to follow.
Moreover, a car’s value depreciates over time. So, you cannot expect to sell your car at the same price you have bought it for. This is why if you plan on upgrading your vehicle, you are losing more money, particularly if you need to take out another loan for it. On the other hand, rentals come with a long-term contract that is up to 2 to 3 years. Once the contract is over, you may opt for a different make and model if you choose to. There is even a possibility of driving a brand new vehicle once you renew the contract.
A Few Things to Consider
It is clear that renting a car comes with more benefits than buying your own vehicle. There are more savings that come with it, and the maintenance part of having a car is not much of a hassle when you are on a lease contract. Just remember that you will have to shoulder the expenses of petrol costs and parking, as well as other small costs even if you rent a car. Still, the total amount of money saved is lower when you rent than when you buy.
Make it a point to search for the best rental company in Singapore for your needs. Take a look at the track record of the company and have a thorough inspection of the car you wish to rent. Also, you need to review and understand the contract well before you sign on it. If you have any question, never hesitate to get a clarification with the rental company. It is better that you comprehend fully the contract details so you know exactly what you are getting into once you decide to drive a rental car for personal or business purposes.
