“Buying a car or renting a car?” is a question coming to mind when you need a car.
Although we cannot give you a one-fit-all answer on this, we manage to list out the advantages and disadvantages to help you make the right decision.
Pros & Cons of buying a car
By buying, it is possible to negotiate the price or the options. The interest rates are lower, the insurance premium too, and you will have no mileage limit (not in the case of staying outside the province and the country).
Also, as the car belongs to you, you can modify it and keep it as it's as long as you like. Your creation will last after you have finished paying with the modifications, and above all you will have the chance to recover part of your payment by reselling the car.
However, expect higher monthly payments than with rental. The biggest drawback, of course, remains depreciation – up to 30-40% of the original value as soon as you leave the dealership and around 10% after each subsequent year. Note that the depreciation varies greatly depending on the make, model and condition of the vehicle.
Pros & Cons of renting a car
First, renting costs less on a monthly basis and paying taxes can be spread out or reduced. Some, therefore, take the opportunity to save money, others to drive a more luxurious model. Then you can sign a shorter-term contract, which is beneficial if you like to change cars more often.
You should also be aware that there are usually fewer problems for tenants in the event of theft.
On the other hand, renting a car costs more to insure because of the refurbishment in the event of an accident. Getting out of the country can be more difficult. If you exceed the annual mileage allowance, a fee will be charged. The same goes for the damage and wear that you will be attributed. At the end of the lease, you have no assets; it is possible to buy the car, but the cost tends to exceed the resale value on the market.
Before buying or renting a new car, it is best to check with your insurance company to get an idea of the premium in either case.
Lastly, insurance is the best precaution you can take to avoid paying for costly accidents in the future.