22 Sep What to consider before you lease a car
Car or van rental in Singapore comes with pros and cons, just like in the case of buying a car. What makes it a viable option is that you do not need to take a loan just to drive a car. You can rent the car and drive it away the same day. Nonetheless, there is a lot to consider and weigh if this really is the best option for you. So check below:
Your monthly cash flow
Are you earning good money that can help you pay off a car loan with ease; maybe leasing should be the second option. But, it also depends, because, with leasing, you can be charging to a different and newer car model with less than $385 per month, depending on the rental firm’s prices.
If your monthly income margin is not that big, leasing a car would be the less painful option and you can have a car at your disposal.
On the contrary, you would need to spend more to own the latest car model. Buying means, you’ll need to first deposit a certain lump sum amount of cash like $7000, followed by monthly payments of approximately $600. So, weigh the cost.
What type of a driver are you
Before you consider if you should lease a car, ask yourself if you’re a cautious driver.
If you are not confident that you are able to keep your car in a good condition and maintain an accident free record, then you do not have to worry about leasing a car. Reason being, when you have leased a car, you need to ensure that even the slightest scratch would be remedied or be prepared to pay for the charges given by the rental firm.
This is contrast to owning a car, where the slightest damage caused by a accident
How much do you drive?
If you drive past 10,000 to 15,000 miles, your lease agreement terms may require you to pay extra for every mile covered depending on the commercial car leasing company. The fair price only comes in if you are “buying” the additional miles at the time of negotiating the lease.
Let’s say you’ve covered an extra 5000 miles, at 20 cents per mile that would cost you some $1000. Nothing much if you’re able to catch up with your profit making errands, right. But if the car was yours, the mileage aspect wouldn’t be a factor either in your budget.
How long do you intend to keep the car?
If you don’t plan to keep the car beyond a few years, then leasing is a convenient option of retaining a private car for the time. However, it is important to know that opting out of the lease agreement earlier than the agreed period would cost you.
Driving the car for business
When you rent, a part of the vehicle’s depreciation and financing costs is reduced on your taxes. Interest on car loans is also not deductible. A guide from an established car rental company will help you understand the deductions for a leased car. That is if you’d like to know more, and that would guide you on how to save on leasing.
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