Owning a car in Singapore is often likened to going for a buffet dinner. Your eyes glimmer at the mouth-watering spread of options but sometimes you bite off more than you can chew or suffer from the aftermath of ill-considered choices. With the frequent spate of policies pushing a car-lite agenda, some prospective car owners have little to laugh about and might even genuinely experience some amount of stomach discomfort from the resulting effect on prices. This is especially so with the government’s move to halt the issuance of new certificates of entitlement (COE), the instrument with which the authorities control the number of vehicles on the road and the development of satellite-based road toll pricing.
This administrative direction is not new and the vehicle growth policy has seen contraction for some time. With outright ownership becoming more difficult for some, vehicle leasing becomes a viable solution. Until recently, vehicle leasing was most commonly taken up by multinational corporations providing expatriated staff with transportation perks, but now there are many good reasons why individuals should also consider this option in the current climate.
For Ease of Convenience
Buying a car is expensive, maintaining that purchase is also a costly commitment. There is road tax, insurance, servicing and maintenance to fork out for as long as you keep the vehicle. If paying your dues on time, hunting for the best insurance plans and mechanic is not your cup of tea, a lease contract frees you of the burden, by typically including these items in the periodic contractual payments – saving you the hassle of doing it yourself. The most significant upside, that has won many over, is that costly maintenance work is often also factored into the price, with servicing and warranty done right at the respective car manufacturer’s factory.
Purchasing a car entails a stack of paperwork. There may be trade in prices for your old vehicle to check up on and work that may need to be done to quality for the trade in scheme as well. If buying a used vehicle, there are transfer fees, due diligence checks and the ever-present risk of undiscovered mechanical problems. The vehicle leasing option frees you from these burdensome considerations and the lessor has to provide a vehicle in the contractually agreed condition.
Lately, leasing companies have also started to offer perks like ‘car leave’, where one can halt lease payments when on holiday and the car is otherwise left idle. It is this increased flexibility and reduced commitment that has gained a growing appeal.
There is little wonder that cars are part of the list of C’s that everyone covets. It promises freedom, prestige and can also attract the kind of attention that one craves. Leasing a car gives one the freedom to change their ride whenever they wish. If one wishes to get behind the wheel of a better performing vehicle or even a car with features better suited for his current lifestyle, vehicle leasing affords the lessee this freedom and allows the change to happen in a shorter amount of time than to sell the current automobile and purchase another.
Likewise, leasing allows one to change vehicles more often, and drive newer or fancier models too, as leasing terms can be charged on an annual or even a daily rate.
Cash is king, especially in uncertain periods and we find ourselves in very unfamiliar times where the threat of political instability seems to loom too close for comfort. Leasing instead of purchasing an asset can be a good way to manage liquidity.
With little or no down payment, and even repayments comparable to an auto-loan, leasing terms are now very competitive. The initial capital outlay is also much lower, at an average of 1-2 months as compared to a minimum downpayment of 30% to 40% required when taking a car loan.
Effective money management is made easier with predictable expenses. There is nothing more disruptive than being saddled with sudden vehicle repair expenses. Leased vehicles are thoroughly checked and guaranteed to be in working condition and maintenance is often included in the contract. These assurances are not always available when buying a car, especially if there is a problem that surfaces after the warranty period.
Pay less sales tax! Although sales tax is ad valorem in nature, by leasing the vehicle, you spread it out across the duration of the rental instead of having to pay for it all at once. Due to the smaller amount, the tax is a considerably lower. If considering the time value of money and inflation, the advantages are further compounded.
Hop on the Share Economy
The enthusiasm with which ridesharing has been adopted has resulted in a corresponding rise in number of car rental companies like ETHOZCab, providing vehicles that meet the requisite insurance and standards outlined by the most popular companies, Grab and Ryde.
These vehicles would be covered under a rideshare friendly insurance, all basic amenities such as air conditioning will be working and a vehicle history that conforms to requirements such as age, accident history and modifications.
With changing times and attitudes, perhaps it is the time to amend the playbook on life’s accomplishments – the 6 Cs. Car ownership is not what it used to be or is cracked up to be. Cash is king and credit is confining, so consider vehicle leasing, it could be the most honest ticket to freedom.