Whether for personal or business use, a car is one of those acquisitions that demand careful consideration.
We need cars that comfortably meet our needs without breaking our banks. They should not only be relatively easy to acquire but also maintain.
Consequently, one of the ever-present questions in our minds when going for our next car is whether to hire or purchase one. Although buying a vehicle bestows full ownership upon you, meaning you are at liberty to modify the car as you want, there are more significant benefits to be derived from car rentals.
In this breakdown, we look at what you stand to gain from leasing your next car and why car hires present better options than outright car purchases.
So, here are five reasons why you should hire your next car.
For the socially conscious, car hires allow you to always keep up with market trends. That is because you can always get to drive the latest car models at no extra cost. As a result, you get to enjoy cars with the latest security features and safety technology.
Figure 1 The Audi Q3 is one of the cars with the best safety features
Therefore, aside from staying hip and trendy, car rentals are a way to enjoy the latest automotive technology without having to sacrifice vast amounts of cash for it.
Besides, hiring your next car means enjoying greater versatility in terms of a broader range of vehicles.
That is because, with car rentals, you are not beholden to just one type of car. Instead, the rental company allows you to swap vehicles to different models if you so wish.
Therefore, with car hires, you can opt for a different car at the end of the lease period. That also means you are guaranteed the choice of having a vehicle suited to every mood or occasion.
On the other hand, purchases are limited to the car whose price you paid.
Purchasing a new car carries huge price implications. These include not just the purchase price but the service and post-warranty maintenance cost as well.
Even if you opt for a used car instead, there is always the risk of unknown maintenance costs. Furthermore, the maintenance costs associated with some used cars can escalate due to undisclosed defects in the vehicle, making your own a never-ending nightmare.
In contrast, car hires do not expose you to hefty purchase prices or any maintenance costs. With reputable car rentals, the car is leased to you at a fixed and determinate cost, with the company bearing the burden of maintaining the vehicle.
Also, hired cars are fully insured by the rental company, which takes away the hassle of looking for an insurance provider yourself. However, with purchases, the buyer has the added obligation to cater to its insurance needs and make sure that the indemnity policy is always up to date.
Figure 2 vehicles such as the Lamborghini Aventador S carry significant price tags and maintenance costs
On a related note, not all insurance claims are settled by the insurer. Insurance companies are known to decline to pay claims based on legal technicalities. Thus, car owners always run the risk of having their insurance claims rejected by the insurers.
However, when you hire a car, you are immune to the loss associated with the loss or damage to the vehicle.
Sometimes, car buyers may not have sufficient financing to cater to the purchase. For that reason, you may be forced to consider financing options.
While most financial institutions are generally keen to avail credit, the process can be lengthy and sometimes very expensive in terms of interest. What’s more, in the event of default, you risk losing both the cash installment paid so far as well as the vehicle.
Avoid lengthy finance approval processes by opting for a car hire arrangement instead. Compared to purchases, car leases ensure that you get the car quickly as there is no bureaucracy involved.
In most countries, the purchase of luxury cars cannot be written off as a business expense for tax purposes.
However, some jurisdictions allow for luxury car hire expenses to be written off as a business expense.
Considering how expensive some luxury cars are, both in terms of maintenance and cost, these tax write-offs, where allowed, can mean substantial savings for your business.
The availability of tax incentives for car hires may be a good reason to consider leasing your next car instead of buying it.
When the lease period on a hired car is up, you have an array of options.
You may treat the relationship with the rental company as having run its course and return the car. Alternatively, you may opt to renew the lease on the exact vehicle and thereby continue using it; or, you may turn in the car for a different make or model.
Some car rentals even give you the option of purchasing the car.
With purchased vehicles, save for gifting them to someone; the only other option available is selling the car.
Resales come with the hassle of having to find a buyer for the car. For some, getting a buyer willing to take a used vehicle at a reasonable price can prove to be a challenge.
This challenge is compounded by the depreciation of the car, a cost that the owner must bear.
However, for rentals, you do not get to suffer long-term depreciation. The rental rates charged by car rentals only feature the depreciation applicable to the car during the lease period. In other words, with car rental, you are not subjected to the long-term depreciation of the vehicle.
Also, rentals do not subject you to the dreaded disposal hassle of having to find second-hand buyers or haggling over the price.