Should you rent or purchase your next car?

With the costs of owning a car in Singapore being as high as they are, it will make little financial sense to buy one if you're not going you use it every day. If you only have to use a car for a few days a month, should you opt to rent a car instead? Read on to find out!

Renting in Singapore: Prices

If your use of a car is only limited to the occasional drive into Malaysia, renting will be ideal

The most traditional option for short-term motoring, renting remains the ideal option for those looking for a car just for the weekend or a short blast into Malaysia.

If you only need a car on rare occasions, renting could prove to be a better option as it allows you to get behind the wheel car while only paying for the selected few days that you actually use the car.

Looking for a car rental in Singapore? Popular rental firm Hertz offers the Ford Focus at just $105 for a single-day rental, while Sixt offers the Honda Fit from $129, although their per-day prices do drop if you rent for a longer period.

Why rent instead?

You will need to visit a physical store to collect and return your rental, unless you're willing to pay to have your car delivered

Renting will mean that you only get a car for a select few days of the month, and lose the flexibility of driving out whenever you feel like it.

Typical rental business also operate out of a brick-and-mortar shop, so you will need to arrange for transportation to and from their store when collecting and returning the car. Alternatively, for an additional fee, some rental firms will offer an additional pick-up and return service.

But you stand to gain numerous benefits as well.

Most important is the fact that you get away from all the maintenance work necessary for the car. This includes all the necessary trips to a workshop for regular servicing, and bringing your car for its scheduled road tax renewals and the necessary vehicle inspections.

Renting will save you the hassle of having to clean your car

Renting also means that you will not have to waste your own time cleaning up the car, as long as it is returned to the rental firm in a reasonable condition of course.

You will, however, still need to pay for the fuel you use, so make sure you make a detour to the pumps before you return the car, as some places will add a fuel surcharge if the car is returned with less fuel than when collected.

Should you still buy a car?

At these rates will it still make financial sense for you to buy a car in Singapore?

By renting, you can also forget about scheduling servicing and vehicle inspections

In our earlier article in which we looked at the on the road cost of a Toyota Corolla Altis, financing the loan, and paying for road tax, insurance and maintenance alone will set you back an estimated $937.50.

That's enough to pay for a rental from eight to nine days every month at the above rates. So, assuming you will be paying the same amount on parking charges, fuel and ERP regardless of whether you rent of purchase your own car, buying a car will save you only if you rent the car for less than eight days a month.

But there are other considerations to think of.

Other considerations...

If you're looking to get behind the wheel of different cars, renting could actually be attractive

Firstly, renting could get you behind the wheel of a diverse range of cars. This point probably won't matter to many, but if you're a petrolhead like us, this could be a significant factor to sway you towards renting instead. If you're only going to be taking a car out on the weekends, you might as well make it a fun drive out right?

Of course, this also means that you have the added option of renting based on what you need for those given few days when you need a car. So instead of purchasing an all-rounder SUV, you could instead rent a smaller commuter for days where will be driving alone, and rent a spacious MPV for those weekends when your pesky in-laws are visiting.

Renting also means that you won't have a car loan counting to your Total Debt Servicing Ratio, allowing you to finance a more expensive home

And here's another thing to consider. If you have somehow landed yourself with a massive windfall but don't have the largest income, renting could also be a more attractive option since it will not have any adverse effect on your Total Debt Servicing Ratio.

By renting instead of financing a car loan, you get the option of financing a larger home loan instead, which could prove handy for finding a home closer to your workplace, helping you to further save while still landing you in a nicer place to live and possibly cutting your daily commute to boot.