Leasing, Sharing, Rental & Private Hires – Which is more cost effective ?
Car Ownership
Cars cost more in Singapore than anywhere else in the world. Not only will a basic Japanese car can set you back by $150,000, there are also several other significant costs involved – Car insurance (~$1,200/yr) and road tax (~$750/yr), and petrol, parking, ERPs,
maintenance, all in at ~$800/mth. With the high price tag on car ownership, are there more economical alternatives?
Alternative #1: Car Leasing
Car Leasing is a long term car rental process where you pay the car dealership for the right to use the vehicle for a period of time. This can range from minimally 6 months to a few years and averagely costs you around $1600/mth for a 1-year lease.
Pros:
No huge upfront deposit required.
Less commitment, can decide whether to renew the lease.
Car insurance, road tax & servicing fees are covered by the leasing company.
Cons:
Cannot do any modifications to the car.
Stricter rules e.g. can only drive the car within SG.
Alternative #2: Car Rental
Car rental is a service exactly the same as car leasing. The only difference is that car rental is short term. This means that you can rent a car for a day, a weekend, a week or a month. Prices for this service range from $80/day to $600/week.
Pros:
Rental fee is a one-off cost as compared to leasing and car ownership where it is a recurring monthly expense.
Useful during periods when you might have to commute more. E.g. when a loved one is in the hospital and you plan to visit regularly.
Cons:
Subject to availability for last minute bookings.
Alternative #3: Car Sharing
Car sharing works as an alternative option to car rental if you only need a car for a short few hours or for a one way trip. Car sharing charges based on time and mileage. A 15-mins return trip costs ~$7.
Pros:
There are several car sharing companies to choose from (Getgo, BlueSG, Tribe car, Shariot etc).
Fees are based on time of use (peak vs off-peak) and mileage (you pay for how far you drive).
Lower age requirement to rent.
Wide coverage of locations for easy pick-up and drop-off.
Cons:
Some of the car sharing platforms requires you to pay for a membership before you can use their services.
Might cost more if you can’t find a parking spot to return the car.
Higher repair costs if met with an accident.
Alternative #4: Private Hires
Private hires are probably the most convenient and hassle-free alternative to car ownership. All you need to do is install the app on your phone and you can start using it. There are also perks such as exclusive rewards & priority allocation of vehicles for rides, depending on your membership tier (Silver, Gold, Platinum).
Pros:
Don’t even need a driver’s license.
Earn points for transactions spent.
Can convert points to rewards such as gift vouchers or products.Membership perks.
No liability for the car.
Cons:
Surge pricing during peak hours/rainy weather.
Hard to get a ride especially at remote areas.
So which option is more cost-effective? Take these factors into consideration.
A: Do you have to travel to multiple locations per day for work?
B: Are you able to WFH?
C: Do you do shift work, thus commute during off-peak?
Of course, cost might not be the only consideration. If you live with young kids and/or elderly parents, then owning a car might come with other invaluable benefits. As with everything else in life, what matters is whether the price tag is within our affordability. And Chloe will be happy to conduct a cash flow assessment for you.
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