June 25, 2024

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What is car leasing?

Automobile leasing is the rental of a motor vehicle, a car in this case, for a specified period of time at a stipulated amount of money. In Singapore, the typical rental period for a car is between two and five years.There is no denying that buying a car in Singapore is an expensive investment. Given that you’ll have to pay thousands of dollars for a Certificate of Entitlement (COE) which then gives you the right to own a car, and adding in the actual cost of the car itself, most of us would end up succumb to public transport or perhaps GrabCar. and taxis to get around.

However, some people may still prefer to have their own personal transportation in order to have that flexibility to get around. Others may need a car simply for business purposes. Renting a car then becomes a cheaper alternative to owning your own car.

If you are buying your own car, you will need to pay a 30-40% down payment on the car depending on the open market value (OMV) of the car.

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Assuming a standard 1.6L Toyota Corolla Altis costs SGD 93,000 including COE, that means you’ll need to pay a deposit of around SGD 27,900 up front. If you were to lease the same car model, you might only have to pay around SGD 1,600 per month depending on the car leasing company you sign up with.

Keep in mind that car rental costs for the same car model may vary from car manufacturer to car manufacturer. As such, it is advisable to get quotes from several car manufacturers before deciding which manufacturer to choose.
Although renting a car may seem like the cheapest alternative initially, we all know that the true costs of owning a car are not about the upfront costs. It’s about car maintenance. This means that when deciding between buying or leasing a car, you will need to consider the following costs in addition to your monthly rental fee:ce

Car repairs

Besides the initial costs and recurring expenses, renting a car comes with a long list of terms and conditions. Car rental companies may have their own terms and conditions when you sign the rental agreement with them.

Similarly, a car rental agreement is similar to any typical contract in which it is likely to come with termination policies. Before signing your car leasing agreement, read the car leasing termination policy in detail. Are you allowed to return the car in any condition? How much notice do you have to give car leasing before you want to end your car leasing contract

Is it expensive to rent a car in Singapore?

Reasons you may consider renting a car in Singapore
With the costs combined, it may seem that buying a car is slightly more expensive than renting a car in Singapore. However, there are various reasons why you may prefer or need to rent a car in Singapore.

You need to use a car urgently and can’t afford the deposit

Are you a financial advisor who needs to travel and meet clients? Or maybe a student unable to get a room on campus? Renting a car is a quick way to get your own private transportation without shelling out a hefty amount of money for that big down payment.

You are planning to buy a car and want to test several models first
With the plethora of car makes and models available, you may be undecided as to which car make and model to buy. Renting a car for a short period, for example three to six months, allows you to test different car models. This can help you better decide which car model suits your lifestyle and driving preferences.If you are an expat who will only be in Singapore for a few years, it would make more sense to rent a car rather than buy one. After all, there is no point in learning about the process of buying a car in Singapore only to end up selling it after three to four years.

Since the monthly cost of renting a car usually includes road tax, insurance and maintenance, renting a car requires minimal effort in terms of administrative matters.

You intend to drive for only a few years

Owning a car is a long-term commitment. Most people buy a car and keep it for at least five to ten years. Maybe you are planning to start your own business but still need a car for transportation or are you planning to retire in the next 3 years and think about how long you intend to drive

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