Author: ETHOZ Group

Rental Car Insurance
Insurance charges1 can be a huge bugbear as well as a source of confusion at the same time. Most of these arise from not fully understanding what is covered and what is not. All cars must have motor insurance coverage to be used in Singapore. The basic minimum insurance required is a third-party cover. This covers your liability to other people involved in a collision but not car damage.

The car rental company will already have purchased the rental car insurance before providing the car for rental. This insurance coverage comes with an Excess that is payable by the Hirer when the rental vehicle is involved in a collision. The excess amount is determined by the rental company and the Excess amount varies depending on several factors such as location of the accident (Singapore or Malaysia), age and the type of rental car. If your rental car is damaged during the rental period, you are liable to pay the excess amount to cover the cost of damage and repairs.

Other additional insurance options you could be offered when renting a car are: (1) collision damage waiver, and (2) personal accident insurance.

Collision damage waiver (CDW) is an additional insurance coverage that a rental company offers you when you rent a car. This waiver is optional, and the cost of the waiver depends on the type or engine capacity of the rental car and where the car is being driven. This waiver limits your financial obligation if the rental car is damaged in a collision. Should you decide to include the collision damage waiver in your rental package, an additional daily fee on top of the rental car fee applies.

The Personal Accident Insurance provides coverage for medical costs, emergency care and accidental death during the rental period. However, it may cover either the driver or both the driver and passengers.

Additional Driver Fee

An additional driver can be any person registered and permitted to drive the rental car during the rental period in addition to the renter. To register an additional driver, many rental companies charge an additional driver fee.

The additional drivers must meet the same requirements as those of the renter which includes the driving license and age eligibility criteria to drive the rental car. The additional drivers’ names must also be added to the rental agreement.

The most important thing to note is that all additional drivers must be approved by the rental company. There will be no insurance coverage for any additional driver(s) not approved by the rental company.

Security Deposit

Majority of the rental car companies charge a refundable security deposit. The deposit is a determined sum of money requested by the rental company just to ensure the renter takes good care of their car. If the car is returned very dirty or with scratches, the company may use the money to repair the car. It is simply a guarantee to the company just in case something goes wrong during the car rental period. After the rental contract expires and the car is returned, this sum of money will then be fully refunded.

Costly Extras

Need a child seat or GPS device? Be prepared to factor these into the daily car rental rate3. The price of this convenience could well cost as much as buying them to begin with. Therefore it is recommended that you plan ahead and calculate your sums and make a comparison to a direct purchase of these extras to see which option makes more economic sense.

Peak Timings

Peak periods such as weekends and public holidays drive rental rates higher. Planning early to book in advance or to avoid the peak periods can help to save money significantly. However, do not write off peak timings entirely. Do keep a look out as car rental promotions are advertised for festive periods from time to time.

Damage Charges

That paint chip when you hit the door while opening it, the scratch on the windscreen caused by a pebble that was kicked up by the truck in front or even a deep gash on the paintwork can rack up the final bill, even if it was someone else’s fault.

Sometimes, renters might dispute these charges which then makes it important to have documented the condition of a vehicle’s interior and exterior upon acceptance of the car. This would help to provide proof in the event of any disagreement. So do remember to take photos for reference before taking over the car and at the end of the rental.

Convenience Charges

To top it all off, there is a catch-all category of service charges and convenience charges that could apply. These include sending the rental vehicle to a specified pick-up location or if the rental car is returned at a place that is different from where it was collected. Of course, there are always some exceptions that some rental companies do go above and beyond for enhanced customer satisfaction. They may offer complimentary collection and delivery of the rental car or delivery of replacement vehicle when the rented car requires servicing or when an accident occurs.

Most rental contracts require the renter to fill up the fuel tank at the end of the rental period. This is usually full or to the same level when the car is collected at the beginning of the rental period. It is also clearly stated in the contract that the renter is fully responsible for all fines incurred during the length of the rental contract. If these terms are not abided by, the cost of fuel top up or fine will be charged to the renter with a service fee.

When COE premium hits sky-rocket high, renting a car in Singapore has become much more affordable than owning a car. The allure of a low daily base rental price is often enough to convince a potential customer to go ahead with car rental. To be fair, it can often be a great option that does not break the bank. Comparing rental or leasing to traditional car ownership further highlights its benefits. There is no need for a hefty down-payment, no loan or upfront payments of one’s hard-earned cash. This gives a renter greater financial flexibility for other much needed priorities.

What differentiates an excellent car rental company from the masses is in its level of customer service. A customer centric company quickly rises above the rest and it would be no surprise that satisfied customers make choices that benefit them the most. A prudent, savvy customer should not only know about the additional fees involved but also which is the right company to rent from. Being a market leader with over 40 years of dedicated car leasing experience since 1981, its experienced teams are well equipped to advise clients on solutions customised to suit their needs. ETHOZ is a one-stop service centre for both corporate clients and individual clients. With one of the widest range of available car makes and models under one roof, ETHOZ is definitely the multiservice, and trustworthy choice for anyone who wants to lease or rent a car in Singapore.

The brands that are synonymous with short term car rentals have long been household names. When most people think of such short term car rentals in Singapore, names such as Hertz, Avis and Europecar are likely the first that spring to mind. Having been founded in 1918, 1948 and 1949 respectively, these names hold a lot of cache and are amongst the weightiest in the industry. Their business networks span the globe and seem to be at every airport and in every major city, ready to serve clients’ every need.

In Singapore, the car rental market has grown steadily. With car prices consistently ranked the highest in the world, it comes as no surprise that many are opening up to the idea of renting rather than owning. In a study completed in March 2020, the market was projected to grow at a CAGR of 3.71% between 2018 and 2024. After spending 2020-2021 in the doldrums, a sharp 20% rebound is expected in the following year, before levelling off to a more subdued but respectable average of about 7% year-on-year growth up to 2025. Capitalising on the strong demand for both long and short term car leasing, Singapore has seen the rise of many enterprises offering such services. Apart from the traditional car rental companies like the ones mentioned above, resale car dealers, car manufacturers and financing companies have built up a car leasing segment in their business. Even car leasing companies that had long been serving only corporate customers have also begun to open their doors to regular consumers.

As with any well developed business, an established brand comes with many advantages for customers. Want to return a rental car in a different city, enjoy cruising in a luxurious sedan or just like having more options? These are differentiated product solutions that these large brands are able to cater to.

Why Enter a Long or Short Term Car Lease With an Established Company

The list of reasons to engage a reputable company when deciding where to rent or lease a vehicle from can be categorised into 3 groups; product offering, convenience and support. Each in itself may not make a compelling enough proposition to a customer but together, the combination of the 3 delivers robust solutions for every need.

In larger, more established companies, the vehicle fleet is often bigger when compared to smaller set ups. Finding the perfect car that meets every requirement without having to compromise would be less of a challenge. Prefer an SUV over a sedan or looking for a sportier ride? With a larger fleet of vehicles, chances are that there’s something in the inventory that fits the bill.

Apart from a wide range of vehicles there could be other services like chauffeured services, flexible tenure options and also different leasing types too.

Personal Contract Hire (PCH) is a medium term rental agreement that typically lasts between 1 to 4 years and the vehicle is returned at the end of the tenure. There is no option of buying the car and the monthly rental amount depends on the length of the contract, the upfront deposit placed with the rental company and the final mileage racked up.

Personal Contract Purchase (PCP) is similar to PCH in all aspects and to a hire purchase (HP) contract which is the way most people buy cars in Singapore. The main differences are that in a PCP, the monthly repayments are lower than that of a HP contract and at the end there is a balloon payment option to take ownership of the vehicle.

Leases can also be open-end or closed-end. This is a way of apportioning the loss when the market value of the car at the end of the lease falls below the residual value as calculated at the start of the contract. This risk can be shouldered by either the lessee or lessor and the monthly repayments are adjusted according to which party bears the brunt of that risk.

Beyond vehicle model selections and different convenient payment options, established car rental companies could have a workshop for repairs and maintenance or they could have a network of workshop partners that clients can choose from. Likewise, there might be breakdown support or towing services and a customer hotline to reach out to in the event of an accident or when mechanical problems arise such as a dead battery that can leave drivers suddenly stranded in an unfamiliar area. There could also be a replacement vehicle available so clients would not be left without transportation while the car is being fixed. These services make it a one-stop-shop that makes the experience of having a vehicle extremely easy and takes out all if not most of the hassles.

However, all these frills come with a price and if one could do without some of the bells and whistles, there are cheaper alternatives.

Long or Short Term Car Lease With an Unestablished Company

Whether it is to an individual or a company, costs always form one of the biggest considerations of any decision. If one is willing to deal with some of the occasional inconveniences or able to handle some of the recurring chores like servicing, opting for a cheaper rental vehicle from a smaller company could be a good choice.

Due diligence, especially with companies that are not a recognisable brand, always pays off. In the worst case scenario, the cheap deal from an unestablished rental company may not be properly licensed to operate such a business. This is a more likely scenario these days when service providers can operate solely online or through a phone app without much of a physical presence.

A more likely scenario are hidden costs and inadequate insurance coverage. If there is inadequate insurance coverage, the driver may be liable for any damages that exceed the amount of coverage. Likewise, this lack of transparency can also cost the driver a substantial amount of money if it is not clarified beforehand. Some examples include a surcharge for younger drivers, no unlimited mileage option, extra costs for breakdown services, lack of maintenance logs or simply adding charges for prepaid petrol. The list can be quite extensive and easily overlooked if one does not know what to look out for.

Smaller companies may also have a smaller range of vehicles or vehicles that are older and not in as good a condition either cosmetically or internally. It is important to note that cost savings may seem to be a priority at the expense of comfort initially but it depends on the duration of the rental. A few days with a vehicle that is a compromise could be ignored or even barely noticed but over a longer duration can prove to be a larger bugbear.

That said, the industry for long term as well as short term car rentals have grown to be extremely competitive and even some smaller companies bring a lot of value to the table but one should always be mindful of the potential trade-offs.

When it comes to the logistics of transporting cargo, size does matter. Much more than bigger is better or the more the merrier, the right size for the job is paramount in every instance. After all, there is little utility to be gained in bringing a 24 ft box truck to carry just a few cardboard cartons from place to place. As commercial vehicles, its primary function is to fulfill the business need of transporting items to different destinations. The job could entail moving a variety of items – some perishable or fragile, others much less so. Consequently, commercial vehicles come in a wide variety of designs to serve specific needs or a combination of requirements. There are trucks and lorries that have cargo beds that are opened to the elements, some that are partially covered with a canopy and there are others that are fully enclosed box trucks. With a bewildering array of configurations to choose from, getting acquainted with what is available makes picking one just right for the job a lot easier.

Lorry and Truck Size Guide

The word truck and lorry are both common terms in the haulage industry and are often used interchangeably to refer to Heavy Goods Vehicles (HGVs) and certain models of Light Goods Vehicles (LGVs) like the Toyota Hiace, especially when in a flatbed configuration.

In Singapore, commercial vehicles are grouped into 4 categories:

• Goods-cum-Passenger Vehicles (GPVs) are the smallest class of commercial vehicles reaching an allowable maximum 5,000kg in maximum laden weight (MLW). As its name suggests, GPVs are permitted to carry both goods and passengers.
• Light Goods Vehicles (LGVs) are allowed an MLW of up to 3,500kg for carrying goods
• Heavy Goods Vehicles (HGVs) fall in the range of 3,501 kg to 16,000kg in MLW.
• Very Heavy Goods Vehicles (VHGVs) are vehicles with MLW of more than 16,000kg.

What is the difference?

Weight is one classification used to describe the dimension of commercial vehicles but the other common method is length. For instance, some standard sizes include the 10ft lorry, 14ft lorry and 24ft truck.

The 2 main factors to consider are budget and shifting when deciding which to buy or rent. Using a truck with a capacity larger than what is needed costs more to buy or rent, uses more fuel and is restricted in terms of parking or access. This might mean that more man power is required to move items to where the vehicle is parked. Shifting within a truck that has too much unused space can also be a problem, especially if the items placed inside are fragile and cannot be secured properly. Often, this means more time needed for stuffing – the process by which goods are loaded – and having to purchase additional packing material or cushioning.

A good way to roughly determine which size to get is from volume calculators provided online. Generally speaking, a 10 ft truck is the minimum needed for a studio apartment. A 2-room apartment might get away with a 14 ft truck but a 5-room home would necessitate the use of a 24 ft truck. Of course, multiple trips can be made instead of a single journey but that all adds up in time and transport costs.

Aside from size, each class of commercial vehicles possess different attributes, perform different functions, attract different taxes and have their own regulations.

Configurations For Your Box Truck Rental

The right tool for the job ensures that the assignment can be completed compently. There are several popular makes and models that dominate this market segment, such as the Toyota Dyna or Hiace, the Nissan NV series, Isuzu and Kia. European brands such as MAN, Scania, Volkswagen and Volvo are also favourite choices.

The most common depiction of a lorry or truck is the one that features a no-frills cargo bed behind the driver’s cabin. It is either completely open, without a canopy, or is semi-covered with scaffolding on both sides that support a metal or tarpaulin roof to keep out the elements. These are used to quickly load goods, equipment or workers and to facilitate the quick unloading of the same. As it is not completely protected from the environment, it is most suitable for transportation over short distances.

For transporting large volumes of building materials like soil, gravel or mineral ores a dump truck is the most appropriate choice as it features a large cargo area similar to a box truck. However, the most important feature are hydraulic arms that can tilt the cargo compartment and quickly empty its contents by pouring it onto the ground or another receptacle.

The box truck is another often seen configuration. As its name suggests, it sports a fully enclosed box as its cargo area. This provides more protection for its contents and also allows for it to be climate controlled, such as a freezer truck or “reefer” to deliver fresh produce. Other handy options include mechanised tailgates that can act as a forklift which helps with loading. There are also non-mechanised versions such as a fold out ramp that allows trolleys into the cargo area, thus eliminating the need to physically lift goods by hand onto the truck.

With a wide array of styles and sizes to choose from, box truck rentals can be tricky to get right but a good place to start is to fully understand the nature of the task at hand. In this way, an optimal balance of budget, capacity and functionality can be achieved when deciding on that big investment into a commercial vehicle. Another sound choice to avoid a wrong investment is to rent or lease a commercial vehicle at a reputable leasing company. In this way, a business owner can try out several different options or do a short term rental while figuring which vehicle is the best choice for the business.

Turning a key in your Mercedes Benz’s ignition causes a number of systems to kick into action. The starter system activates the engine. The engine system turns petrol into mechanical energy to turn the wheels that make your Mercedes go zoom, while the electrical system ensures all components such as lights, computer and on board instruments work flawlessly. What one does not usually expect is that the vehicle remains unresponsive – unable to spring into action upon command, especially if it is a renowned luxury brand such as Mercedes. There are several things the car owner can do to prevent this, with one of the most important being regular car servicing at a Mercedes Singapore service centre or a qualified third-party workshop to keep his ride in good shape. This ensures each of the 8 systems that keep a car running smoothly, remains trouble free.

What is included in Mercedes service packages

This quarter yearly inconvenience staves off greater inconvenience further down the road by extending the service life of the vehicle and its effectiveness by addressing any problems that are detected during the checks carried out during servicing. For a Mercedes, car service on a regular basis is important for 2 key reasons. These are performance vehicles that operate according to precise German standards within a given set of operation parameters, with an emphasis on performance that Mercedes is famous for. Depending on how it is driven, this generally puts greater strain on the mechanical components, especially in intermittent city-type traffic and in tropical conditions that are both hot and humid. Preventative maintenance is therefore a very important aspect of car ownership and regular servicing, integral to proper, uninterrupted function.

Vehicle servicing can be purchased as a package which throws in incentives like savings on a bundle price and freebies or it can be obtained as individual servicing sessions. In both cases, there is a relatively standard set of checks and procedures that are carried out.

Mercedes service packages usually include the following:

Functionality Checks
Wiper

• Horn
• Headlamp and signal lights
• Tyre
• Belt condition

Replacement and Top-up
Changing engine oil

• Changing air filter
• Replacing spark plugs
• Replacing engine coolant
• Replacing brake fluid
• Replacing power-steering fluid

Diagnostic Tests

• Alternator
• Battery load test
• Control Units Functional Check

What Could Go Wrong without Maintenance

It seems everyone knows of that one friend who has an absolutely hand-off approach with his car. It never gets washed and goes years without servicing. In spite of this, it seems to run without a hitch, day after day. However, what goes on underneath the hood could tell a different story and the car could be just a day away from a catastrophic breakdown.

Servicing essentially comprises 2 areas which is replacing consumable items such as fluids and items worn out through usage and the other is to detect abnormalities or problems that are not yet critical but will lead to complications. Examples such as a worn out alternator belt, damaged suspension or cracked CV boot would not immediately cause a car to stall but it would result in serious problems if left unattended for some time. Technicians could also fine tune computer controlled actions such as the firing of the spark plug at the most optimal time, to get the best performance of the vehicle.

Among the standard items that are changed (~10,000km) during every service appointment is engine oil. Along with that at slightly different intervals (~30,000km), engine coolant, transmission fluid, brake fluid and power steering fluid. Without engine oil, the engine would be damaged as there is no lubrication as the piston moves inside the combustion chamber. The constant rubbing would compromise the tight seal around the chamber, resulting in a loss of power and eventually a damaged engine. Lack of coolant in the radiator leads to overheating and causes the car to stall. Insufficient transmission fluid causes rough gear changes, while brakes and power steering would be lost without the appropriate fluids for both, potentially leading to serious accidents. Aside from that, damage caused to these components can also be costly to fix or replace, definitely a lot more expensive than paying for regular maintenance.

Tyres are seldom given significant thought and more often only looked at only when there is a flat but it is one of the most critical components of ongoing care in any car. Pattern of wear gives a good indication on how a car is running and what condition its systems are in. For example, uneven wear patterns could point towards an issue with wheel alignment, tire balancing, or even suspension problems. Keeping tyres inflated to the recommended pressure level, balanced, rotated, and wheels properly aligned, can help avoid the extremely dangerous occurrence of blowouts at high speeds.

Other critical parts of the car are the battery, alternator, brakes, and suspension. During regular servicing, these should be checked for its condition. Any one of these items in a faulty condition would cause the car to break or be dangerous to operate. Finally with many modern Mercedes models, the Electronic Control Units are akin to the brains of the whole machine. Several systems such as the electronic fuel injection (EFI) system, to the in-car entertainment, to the advanced safety features and sensors that enhance safety when driving on the road are controlled by an electronic control unit. A service technician with the appropriate diagnostic tools are able to fine tune the settings to ensure everything is working well.

In summary, there are many advantages to visiting the Mercedes service center that make the expense worthwhile. The risks of not servicing one’s vehicle is the incurrence of extra cost. A well serviced car can consume fuel more efficiently, using less petrol. It also puts less strain on mechanical parts, enabling them to last longer before having to be replaced. Performance can also be compromised on a car that is infrequently serviced as parts that need to be changed due to wear and tear or damage continue to be used. A Mercedes with compromised parts may potentially lead to compromised safety as well, as the behaviour changes and becomes unpredictable. Even when a vehicle is going to be sold off, regular servicing pays dividends. A car in better condition and with proper service records would be able to fetch a better second hand.

A little goes a long way to maintaining the condition of a Mercedes or any car for that matter. Regular servicing may seem like a lot of money to spend at that point in time but it saves much more in the long run.

First came the bicycles, which brought the roads. Soon after, came the motor car1 which revolutionised all corners of the world, from increasing a person’s mobility both physically and socially to opening up opportunities to changing the way we access services and facilities. As cars became an integral to modern life, it did not take long before rental services became available. Just as the first mass consumer vehicles rolled off the factory lines with Henry Ford’s model T at the dawn of the 20th century, several of the major car rental companies that we have today were also just starting out. Amongst these, are Avis, Sixt and Hertz which all have a history of over a century.

The quintessential car rental company is seen to have a relatively straightforward business model in which a company with a car allows an individual to use the vehicle in return for a payment based on the number of days or distance used. Indeed, this was the business model for many years and it served the market very well. However, the world is constantly changing and nothing stays the same for long. In an industry defined by speed and convenience, businesses have to evolve to maintain its going concern.

Short Term Car Rentals in Tune with Lifestyles of New Generation of Clients

Growing mobility, connectivity, a quicker pace of innovation and a desire to have more with less gave rise to the asset-light lifestyle2 where people pay for access to use an item instead of owning it outright. In a globalised world where employees frequently relocate for work or on the other side of the spectrum where the office is online and commuting is unnecessary, owning a car may not be the most financially prudent acquisition. In cases like these, access to usage rather than ownership is the important factor. This mindset has also trickled down to corporations that see it as convenient and also financially sensible. It can concentrate on its core business and no longer has to factor in distractions like maintenance, depreciation, disposal, or asset carrying values. The annual figures show a clear indication that this is a growth sector4. The Singapore car rental market revenue made up US$154 million (S$ 210.46 million) in 2018 and is expected to reach US$205 million by 2022. Projected to the coming years, revenues are expected to grow at a CAGR of 11.73 % from 2021 to 2025, with a growth of user penetration from 6.3% in 2021 to 9.3% in 2025. This has created an opportunity for car rental and leasing companies; one that these businesses have been quick to capitalise on.

Car Rental in the Digital Age

Short term car rentals have become a popular alternative to ownership and to continue building on this momentum, car rental companies have had to become much more competitive by offering the following:

Greater Options

People love choices. Being able to select extras like GPS, a sun roof, additional insurance or the ability to include home delivery and pick up of the vehicle all add to customer satisfaction as it accommodates their unique circumstances or preferences.

Flexibility

Convenience and adaptability is another feature that has come to be expected. This can come in the form of hourly, half day or even overnight rentals instead of the traditional daily terms.

Car Sharing

With smartphone apps, car sharing has entered a new realm of possibilities. It has never been easier to facilitate this mode of short term car rentals. Cars are collected and returned6 at several possible predetermined spaces for durations that are measured in blocks of 1 hour or 30 minutes. The entire transaction can even be completed on the phone without any human interaction. In addition to cars, Hertz has also made the model of car rentals available to commercial vehicles like good vans.

Going Digital

Smartphone apps have also been used to simplify7 the process of traditional vehicles. With it, customers can skip the queues and reserve their desired vehicle in advance with the options that they want. The apps have also proven beneficial to car rental companies that are now able to build more accurate customer profiles and make tailored offerings.

Subscription Based Models

Companies such as BlueSG and WhizzCar6 were amongst the first to operate on a subscription basis. Gradually, more established companies like Hertz and Enterprise caught on8. The advantage to the customer is more competitive pricing because membership all but guarantees that a client is locked into the service. Another benefit is the ability to switch between different makes and models of cars within the fleet of vehicles. A member could be driving an SUV to pick up passengers one day and making use of a goods vehicle the next day to make deliveries.

Corporate Customers

Just like individuals, corporate clients have been looking for ways to simplify their operations while still being able to preserve or improve their service levels. An asset light strategy suits businesses well as it allows them to tap into a greater range of resources and expertise. For example, chauffeured passenger vans to shuttle VIPs around can be accessed without the need to hire a company driver or to purchase a company vehicle which might be sitting idle for the large part of the day.

Future Proofing

Vehicles are considered long term assets and last for the better part of a decade or more. Buying a current model today exposes the owner to obsolescence at some point, especially as advances in technology accelerate. Short term rentals ensure that the newest or at least newer are available for use. This is especially true for technologies like electric or autonomous vehicles.

As the car rental industry undergoes rapid overhaul, the major players have been quickly adjusting9 to the many threats and opportunities. What this means for potential customers is the expansion of choice never before available, challenging the traditional concept of ownership and making short term rentals a more efficient, resourceful and viable alternative.

Vans are a do-it-all, utility vehicle that have a place in our hearts, from the iconic Mystery Machine in everyone’s favourite Scooby Doo cartoons that can carry a whole team of private investigators and large-sized dog to today’s beloved package delivery man bringing presents from the internet. With its upsized capacity, there are endless possibilities and functions that these versatile vans can perform. From carrying commuters to cargo, these capable carriers buck the adage that less is more. While it is clear that vans can help a person or a company accomplish a lot, it is less clear whether a cheap van rental or buying one outright is better.

Pros and Cons of Van Rentals

Van rental prices are one of the biggest advantages of choosing a cheap van rental instead of buying. The monthly rental is a convenient all-in-one1 fee that includes road tax, insurance, service and maintenance which can add up to quite a fair amount.

Although leased vehicles can vary in age, there are also leases of brand new vehicles. An advantage of leasing is that the lessee can change to a different van after every few years, given that a typical contract lasts for 3 – 5 years. This is an especially valid consideration as electric vehicles are becoming more efficient and viable for commercial purposes. Buying a van and fully paying off the loan in 7 years to be saddled with an obsolete vehicle instead of a productive asset negates the main advantages of buying altogether.

This shorter commitment period with leasing contracts is advantageous as it brings with it the flexibility to extend the contract, amend it or upgrade of vehicle.

This brings us to some drawbacks of cheap van rentals. Contracts may include a clause for excessive use that restricts wear and tear such as disallowing unspecified drivers, putting limits on total mileage or to restrict operation of the vehicle outside of the country. There may also be restrictions in the event of an accident, since the insurance policy is included in the contract.

As with any amendment of contract terms after signing on the agreement, costs may be incurred. Likewise, breaking the leasing contract prior to expiry can be expensive so although it is a shorter term commitment than buying a commercial vehicle, it still places a financial burden on the lessee for some time.

On the other hand, a passenger van rental can make accounting sense by presenting it as an operating expense rather than having a capital expense on the books. Additionally, the company may wish to avoid listing a liability such as one incurred when taking a loan to buy a car.

Pros and Cons of Buying a Van

Ownership comes with a certain amount of freedom. When the company considers the prevailing van rental prices and chooses to own instead of rent, it is free to operate, maintain, use and even customise as it sees appropriate. Operating costs can be controlled by using cheaper workshops and cosmetic repairs can be delayed if necessary. At the end of the service life of the commercial vehicle, it can also recover some costs.

If purchasing first-hand, the newest model vehicle can be obtained and almost always, the mileage would also be lower. This is beneficial because newer vehicles perform better than older ones, needing less repairs, are more fuel efficient and are in better general condition.

Buying a commercial vehicle could also be a good option when interest rates are low or if the creditworthiness of a buyer entitles him to the best rates. The disadvantages are that these loans are considered when calculating a person’s Total Debt Servicing Ratio (TDSR) which limits an individual’s debt ratio.

The downside is that the buyer has to bear all the costs of ownership such as the down payment, maintenance and repair costs, COE bidding, road tax and eventual disposal. It is a long term commitment and some of these costs like servicing and repair can get most expensive with age.

Finally, because servicing a loan can be a long term commitment, there is a risk of default unlike when one is just leasing. A default will negatively affect credit worthiness and may affect application for other loans in the future.

Which is Better – Cheap Van Rentals Or Buying a Van?

Choosing which route to go down depends on many factors, especially the economic climate which determines the future business outlook as well as uncertainty. There is a global trend towards default on car loans and that can be taken as an indicator of difficult times and also as a signal that interest rates will increase to mitigate the effect of the defaults if it persists.

Aside from these macroeconomic factors, there are 3 main considerations to take. First is liquidity and cash flow. Buying a commercial vehicle involves large upfront costs. Taking advantage of a cheap van rental helps to reduce the financial burden and spreads out the costs over time. If this van is integral to the business operation, it helps generate cash flow to finance its monthly costs.

Next is maintenance, especially if your enterprise needs to operate a fleet of vans. The all-in-one pricing which includes servicing, accident recovery and repairs could help to streamline the business instead of having to dedicate time to do everything by oneself.

Finally, there is the consideration of total cost over the period that the commercial vehicle is used. This includes all promotions, cashback and inducements given by the leasing or dealership and also takes into consideration prevailing factors like interest rates and COE prices. When these are all taken into account, then one can properly appreciate the softer factors like choice, flexibility and convenience, and make a fully informed choice.

The joy of driving a continental car is palpable from its widely proclaimed reputation for quality, comfort and luxury that precedes it, and subsequently quickly confirmed when one steps behind the wheel of a Mercedes, BMW, Audi or Volvo. From the distinctive comfort of the driver’s cabin to the electronic functions ergonomically installed within easy reach, the driving experience is an elevated experience.

However, continental cars also have the reputation of being costly to maintain; servicing is more expensive, genuine parts take longer to arrive, prone to breakdowns. This tarnishes the gilded dream that some have of owning a prestigious continental vehicle such as a Mercedes Benz. It’s as much a well tuned driving machine as it is a status symbol. This then raises the question of how to keep this gorgeous machine purring like a kitty without breaking the bank?

A Growing Taste for Continental Vehicles

The population of continental cars has been on the increase1. Growing affluence, demographics and no small amount of advertising has pushed the popularity of continental cars. Taking the absolute numbers of Mercedes Benz as an indication, over a period of the decade leading up to 2020, it can be seen that the German brand has grown over 100% from 30,467 to 64,886 vehicles. In the same period, the ever popular Toyota fell 9% while the total car population in Singapore increased by 6.4%2. Despite the growing fondness for these European imports, the fact remains that its upkeep is not the cheapest. To the new owners of a Mercedes Benz, and probably to many existing ones, the perennial question is how to keep running costs low. That usually leads to the million dollar question; are specialist workshops or dealership-operated after sales centers the better choice for Mercedes Benz servicing?

The Options for Mercedes Servicing

New cars typically come with a servicing package for the first few years. Within that time, repair work might also have to be done at the dealership’s service center in order to keep to the terms of the warranty. After that, an owner has two choices, to continue going to the dealership or to switch to an independent car workshop.

Mercedes Benz servicing comes in two packages, simply named A and B3. Service A is done after the first 10,000km, while service B is performed after 20,000km, with each alternating every subsequent 10,000km or 1 year.

Service package A being a minor servicing consists of the following at a cost of between $400 – $500.

• Mercedes Synthetic Motor Oil Replacement
• Oil Filter Replacement^
• Brake inspection
• Tire pressure checks & adjustments (including the spare)
• Maintenance counter reset

Service package B is considered major servicing and costs roughly $700 – $800 to perform the following:

Mercedes-Benz Synthetic Motor Oil Replacement

• Oil filter replacement^
• Cabin filter replacement
• Tire pressure inspection
• Brake fluid inspection
• Brake component inspection

The equivalent at an independent workshop could cost5 approximately $300 and $600 respectively. Which option to choose looks like a foregone conclusion but how does the private workshop achieve its cost savings?

Advantages of Using an Independent Workshop for your Mercedes Servicing

Cost savings is the biggest advantage of going to an independent service center, speed is another which comes about because there would naturally be many more independent workshops than a dealership can operate. Securing a date and time to suit your schedule would be much easier. Drivers might also find that last minute bookings may even be accommodated.

Returning to the point on competitive pricing, independent workshops are usually able to offer lower prices for several reasons. Lower overheads is one reason. Operating as a standalone workshop, it does not have a big facility, multiple departments or a large payroll to account for, so overheads are typically lower. They are also able to source for non OEM parts, discounted original parts or even used genuine parts. They are at liberty to exercise more resourcefulness to meet clients’ budgets.

Dealing with an independent workshop is also a more personal process. Over the years a relationship can be built up whereas an authorised workshop is more impersonal. As such, better pricing or discounts can be extended to their loyal customers. The workshop owner would also be better acquainted with the problems and service history of the vehicles; knowing its particular quirks and how to repair it more efficiently. In contrast, drivers usually meet the service advisor at an authorised workshop and would not have a chance to meet or speak with the mechanic assigned. An additional benefit of building relationships with privately owned businesses is that there is greater flexibility to go the extra mile, such as staying open a little longer to allow drivers to collect their car at the end of a long day at work. They might also be more willing to do work that authorised service centers would not be willing to due to the time and labour needed or in a bid to upsell products.

Advantages of Dealership Service Centers

Servicing a vehicle at the dealership is strictly by the books. The rules of engagement are predictable and fixed. The mechanics follow a manual and a prescribed list of steps when attending to vehicles. Mechanics are all trained to a uniform degree of expertise and the appropriate industry standard tools and diagnostic equipment are used. Original parts are always used to guarantee optimal performance but that could take time to ship in which adds to the cost.

The process could also be more streamlined as many have adopted the use of apps or websites to receive and make bookings. Even when dropping off the car, the driver only has to deal with a service advisor and never has to meet the technician or understand any of the mechanical issues. Lastly, as a larger entity, dealership owned service centers are less likely to close down.

As with many decisions in life, few questions can be answered with a definitive answer. Both options have their pros and cons. The decision to pick one over the other comes down to the value a driver puts on time and quality assurance. Finding a trustworthy and experienced private workshop can take time in order to reap the benefits of better personalised service at a more favourable price. To make the decision just a bit more complicated, large independent workshops such as ETHOZ blur the line between the two and can offer the best of both worlds.