To Buy or Subscribe To A Car? Ask Yourself These Questions…

Up to just recently, we thought that car ownership was on the downtrend and ride-sharing was the way people would prefer to get around. But then the pandemic hit the world and suddenly driving your own car became the top preferred mode of transport again. There is, though, an in-between and that is car leasing or subscription or long-term rental, however you’d like to call it.

If you are deliberating between buying or subscribing to a new car, here is a list of questions to help you:

Subscription

  • Do you have limited cash to put down as a downpayment? Car subscriptions will require a security deposit still, but it is less than the hefty 10% downpayment to buy a car and it is refundable at the end of the programme. 
  • Do you like to swap cars every few years? Some companies allow you to change cars during the duration of your plan.
  • Do you need the car for just a year or two because you expect to relocate or your needs to change? For example, if you are in town for a short-term work contract or if you are an expatriate.
  • Do you want to spend less in the short-term? Your only expenses with a subscription plan are the initial deposit, monthly subscription payment, and toll and fuel, of course. 
  • Do you want less hassle in regards to the maintenance and upkeep of the vehicle? The car company will take care of all that. Furthermore, look for a package that offers concierge service to deliver the car, pick it up for maintenance and return it to your doorstep.
  • Do you want someone else to manage the road tax and insurance renewal? The service provider will take care of it when it is time. 
  • Do you accumulate low to average mileage every month? Some subscription packages have a limit on the monthly mileage and charge extra beyond that. 

 

Outright Purchase

  • Do you have enough cash for the downpayment? This is a hefty 10% of the car’s purchase price, besides tax and insurance costs. 
  • Do you like to drive the same car for at least 5 years? You like the sense of familiarity when behind the wheel.
  • Do you want to have more value for your money overall/for the long-term? While you might pay more in the short-term with an outright purchase—deposit, monthly loan repayment, road tax, insurance, maintenance, repairs etc— you still own an asset that you can sell in the secondhand market. All things considered, you would spend less on an outright purchase.
  • Do you like being in control of the details and maintenance of your car? If you are a petrolhead that enjoys customising your ride, you can only mess about with a vehicle that you own. 
  • Do you not mind managing the road tax and insurance renewal every year? If you think this is an insignificant inconvenience.
  • Do the cars you own have sentimental value to you? Here’s a test: Do you give your car a name?
  • Do you accumulate high mileage every month? Car subscription programmes either come with a mileage cap or a significant add-on charge for a high-mileage/no-limit option. If you travel outstation often, it might cost less in the long-run to buy the vehicle outright. 

 

If you answered “yes” to one set of questions more than the other, perhaps that is the option you should lean towards.

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