18 Oct Should I Buy A New Car Or Lease A Car?
If you are tired of constantly feeling crowded in buses and trains every morning, you might have pondered on what it would be like to have your own car.
Before you get ahead of yourself, there are a few things that you should take note of when it comes to buying a car in Singapore.
Basically there are two ways of which you can own a car: buying and car leasing. The most obvious difference between these two is that leasing means that you only temporarily own the vehicle for a few years, while buying a car means that the vehicle is your own asset.
Here is a more comprehensive breakdown between buying and leasing a car in Singapore:
Leasing A Car
Leasing can also be referred to as renting a car for a period of time. You do not need to pay so much upfront as when you are buying a car; there is no down payment cost as you are only paying for the lease of the car’s diminishing value. As such, depending on the model of the vehicle that you are leasing, paying the lease could amount to more then the cost of repaying a car loan if you were to purchase a car.
Since you are only renting out the car, you are not allowed to make any alterations to the vehicle. When you eventually return the vehicle back to the dealer, you do not have to worry about selling it or exchanging it for a new one.
Another thing about leasing a car is that you do have to worry about insurance and car maintenance costs, as these are covered by the leasing company.
Leasing a car is generally the preferred option for those who are not staying permanently in Singapore, or for those who really need a car but do not have the sufficient funds to actually purchase one.
Buying A Car
Did you know that Singapore is the most expensive country when it comes to buying a car? You buy a vehicle in Singapore either by paying for its amount in full or if you are unable to afford the initial down payment, by taking out a loan and gradually paying it back in instalments. Unlike leasing a car, where things like road taxes and insurance are covered, buying a car requires you to pay for these in addition to other matters such as petrol, parking, and maintenance.
Because owning a car is a long-term commitment, buyers need to be sure that this is what they want. The down payment when buying a car needs to be paid upfront and the amount depends on the car’s Open Market Value (OMV).
Car owners are allowed to sell or trade their car at any time, although if they wish to purchase a new car they will have to pay off any current remaining loans.