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Should You Buy Or Lease A New Car In Singapore? | Backseat Driver - YouTube
Channel: Sgcarmart
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Hey guys, welcome back to Backseat Driver
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I'm Julian, he's Desmond and he's Jonathan
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and today we are gonna talk about the differences between
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buying a car and leasing/renting a car.
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So what's the question again? You said you want to ask us
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What's the difference between renting and leasing ah?
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I think renting is short-term right?
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Ya I think renting is probably the very short-term kind
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let's say you want to rent for like two weeks or a couple of days
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and I think generally leasing is slightly for a longer period,
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I don't know of the top of my head, but something like
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Let's say you want to lease for a year, two years that kind
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And I think leasing has a better
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plans as well, plans i mean as in
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If you do the math, renting will be more expensive la
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I think leasing will be, the have different packages
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that can actually, it's quite bank for buck one
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Ya I suppose the other thing about leasing is that that's what
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some people do as far as private hires are concern la
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So the cars that they drive, they are actually leasing
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from the company that owns all these car
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Oh okay, because I hear people rent their car for private hire
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So in actually fact they are actually
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They're probably leasing for private hire la
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Cause rentals, generally we think of rentals as very short-term
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Like ad-hoc kind where its
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CHINESE NEW YEAR!
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Ya, you need it for two weeks, for one week
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maybe, a month max.
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But, ya that's probably the difference
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Ya, what's stopping more people from leasing
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because I assume Singaporeans mostly buy their cars
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I think people would
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Want to buy a car, rather than lease
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and I'm just from my own experience
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is I think people would like to be
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uhh
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They would like to own their own car
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They'd like to say, you know what, this car belongs to me
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I'm accountable for this car
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You know, I
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All my hard earn money, my savings and bla bla ba
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I actually blew it on this car
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and it belongs to me, I can do whatever I want to do with this car
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I can mod my car, I can go tracking, I can you know
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Drive like a maniac. if anything were to happen, it's fine
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I'm accountable for it
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I think if you lease a car, there are certain limitations to it.
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You obviously cant modify it
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Umm
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I don't think you can
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Because you won't be the only one using the car like
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after your lease ends like after two, two and a half year
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someone else might probably
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I'm sure it's written into the contract
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Ya, and I think if you happen to have like you know
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this car like I saw this hatchback Mazda 3 hatchback
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and I really like the Astina variant is just top notch but it's
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maybe white colour
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and then my Fengshui master say, you know what
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you can't drive white cars, you need to have it in black.
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And I really just want this Mazda 3
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I can't take the car and just you know, go to a workshop and
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spray it black
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I've gotta.
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pretty sure I
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kinda need to like
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the colour has to stay ah original.
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So I think that's probably
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that's probably, so you can't customise your car if you lease
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uh but there are several good options right, leased car?
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I'm sure I mean, I think the big difference between leasing and
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owning a car I think is primary in that sense, ownership ah.
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So I think, in Singapore, car still bring with it a certain
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level of status la, to say you know, I can own my own car
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So i think that is something that still
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But nobody will know that the car I'm driving is leased or
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I guess it's partially true, but
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At the same time, I think it's also the act of buying your car
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Boasting rights
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Full grown adult now, I mean it's also a personal thing right
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To say, oh I can own my own vehicle now
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But I think that's the ownership part of it, so
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on the leasing part of it, I think
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I think you made a very good point, which is that I think there
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are some obvious benefits to leasing, so
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umm
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You obviously get more options, more choices right
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because umm
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Your commitment period is a lot lower whether
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you lease for, a year, six months, two years.
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It's significantly less than a ten years COE cycle
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If you own a car for ten years la, so I think there's that.
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The flip side of course like you said is the financial aspect
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So, I think maybe why some people are quite, might be put of by
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leasing is just the fact, you know you see, eh woah
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by monthly, so much more than if I buy the car then I
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calculate the depre ah, right.
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Umm but,
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There of course the question of,
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can you afford to buy a car? Because if you're buying a car
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You are looking at, 30% upfront, 40% upfront
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You know and, that's, no matter how we calculate right,
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thats gonna be a big sum of money, a big number that
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not everyone can swallow, so
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if you want to have the usage of a car, but you
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don't think you need it for ten years and you don't really
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See yourself to be able to come out like lets say
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$40,000 upfront, then I think leasing gives you a level
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of flexibility that owning a car cannot.
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But I know that like, Audi has Audi on demand, that have a
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list of cars
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Quite a wide variety of range or rather a wide variety of cars
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on their website
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where you can choose
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So this sorts of programme has got it's advantages,
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the first one is, if I have
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if I'm cash-ready right, and I wanna buy my dream car
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I wanna buy an Audi, but I don't really know what kind of model
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I wanna buy yet
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I've got a family, maybe I'm thinking A4 but A4 could be too small
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I might need an A6, right so I can't just throw my 40% down
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and say, let's just buy an A4, if it's a mistake, I'm gonna lose
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like a lot of money
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So that's where the leasing come in, so lease
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programmes allow people to try out different cars before
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committing to them
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So if I go Audi on demand I can try an A4, if I'm not
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If I feel like, you know it's just not for me,
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it's fine I can just return the car and take the A6
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and then realise, you know what, maybe the A4 was better
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just return the A6 and get the A4, I'll buy the A4 now.
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So that's one thing.
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I remember several years ago when I went for a 7 series launch
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with BMW, the actually brought along this financer, who actually
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explained to us about their leasing programmes.
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And I think upon calculating everything,
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I spoke to the guy, it was actually slightly cheaper than
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buying a car.
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So that sort of gives you an option. So BMW sort of
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allows you to buy into their brand, buy into a luxury brand
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let you experience it before committing.
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And I think the best of all is, its sort of,
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these programmes sort of allow you to try out cars
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that you know, you probably will never get to own cars like,
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Z4 or R8, or you know, you just wanna try for a week or two.
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But of course you have to pay for it la.
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It sounds to good to be true eh, if leasing BMW is cheaper than
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owning one, why would anybody wanna buy a BMW
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why don't everyone just lease it?
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Because like what Desmond said, I think its a sense of ownership.
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The sense of ownership and I think
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the other side of it is there's no guarantee that
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there's the car that you want because, essentially
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okay so, I think we need to differentiate leasing in sort of
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two broad categories la,
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So I think, 1, we have your brands that are doing
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in house leasing.
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And then the other one is you have like leasing companies la.
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So with this leasing companies they obviously own ah
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portfolio of cars right, so let's say they own
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50 Avantes/ Mazda 3s/ Altis, so they have that sort of
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in their inventory to move anytime they want.
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With this premium brands who are also doing this leasing
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programmes, I'm quite sure they are not going to own
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Let's say BMW, they are not going to own 50 3 series
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just waiting for people to lease, they may be going to have
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three or four, right so maybe they have limited numbers
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of each models, so if lets say you are looking to buy into
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looking to getting into these leasing programmes with
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some of these brands, there's no guarantee you can get
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the car you want, right, because
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who knows if the car is available?
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Secondly, there is no guarantee you can get it for the
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length that you want. Lets say you want it for one year,
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but, maybe they only have it for six months period.
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because either someone else has booked it for
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another six months period or maybe the car is just being moved
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into secondhand market or something like that.
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So, I think that the availability is gonna be a challenge.
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And then
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Secondly is the sort of the personal aspect of it la which is
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lets say you buy a 3 Series right,
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maybe you want a 3 Series in a particular kind of trim, colour,
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engine option, interior equipment, that kind of thing.
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Right so if you're buying a car obviously, you have that choice.
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With leasing, maybe you don't la, you know, maybe
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you could find that specific, specification that you are looking
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for but, ultimately, you are limited by what is available to you.
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So, I think that sense of, hey this is my personal choice of car
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in the way I want it to be is also missing, so
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maybe thats why people don't
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immediately get in this leasing thing which is quite
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sort of strange, in a sense.
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Because in places like Europe, that is primarily
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that's quite a big part of the business model.
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Leasing programmes are actually a big part of the car ownership
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in Europe.
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So why isn't it bigger, here?
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I think again, what Desmond said, I think
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I think it's a cultural thing also.
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I think not just that, I think its a status
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I think its a status symbol.
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Wanting to, own a car, to be able to say,
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oh this is mine, and I think the
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second part of it is probably also because of COE la.
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So, from a brand's perspective,
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the financial sense of holding al large fleet of vehicles, I think
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It's a big financial outlay for them also la.
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So I don't think, that's why it's probably another reason
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If you think about it right, I wonder if we are
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thinking about this wrongly.
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I think we are thinking that you know what, leasing is
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not a...
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We are not for leasing because you know why,
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you can't customise car, you know I can't mod the car, I can't
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go tracking, I can't do this, I can't do that.
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But, I think that's because, leasing does not target people like us
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Ya. for sure, I think, ya I think there's a big difference
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like
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I think ultimately it also comes down to how you
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how you see yourself using the car, right.
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And I think thats the big difference between owning and
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leasing ah which i think leasing is obviously a shorter term
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commitment, shorter term period
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So I think if you, let's say you need a car for
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a year, for two years, maybe you could be
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an expat, coming to Singapore or
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you are in a phase of life, where maybe you had your first kid.
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and then you realise that, okay I need to sort of
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send my kids around, then, and you are sort of
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not to fuss about, oh I must own the car, you're just thinking of
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it as four wheels and a roof to get you around ah.
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Then I think leasing, is an attractive option for people.
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If you're not worried about how people perceive you like,
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Ughh this guy is driving and Altis like, you know if youre not that kind of
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brand haul, you know you don't worry about
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what other people think about you, I think leasing will probably
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be for you, I think leasing is a very smart, viable option.
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It doesn't bog you down for ten years,
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you get to drive your family around in a very fuss-free manner,
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you just pay one amount and that one amount probably include
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road tax, insurance your instalments
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I don't know how the servicing works, to be honest.
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I think different companies got different ways of servicing
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It's all in the contract, it's probably different but,
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I just have to make one payment, I don't have to worry about
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Aww man my road tax is due, oh i gotta do insurance
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woah I gotta do inspection.
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There's a lot of things, as a car owner, you got to do.
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But I think if you lease a car all these are essentially
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It's more fuss-free in that sense
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Yea
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The other thing when you talk about the cost factor
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is that, yes ok lets say you were saying the Altis where.
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your lease is $1.6k a month
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and then you buy, you're depre may be maybe $900.
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That's true, right that is objectively true.
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But if you think about it, let's say you lease for
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for a year ah, that's still going to be cheaper.
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Even if you lease for two years, three years, that's still going to
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be cheaper than buying a car, because, once you calculate it
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up right, yes the money might be more but, ultimately your
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total sum that you are going to spend on that car is less ah.
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So if,
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if you don't need a car for ten years,
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I think leasing, is a
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is a reasonable option.
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Like you said, its a very big financial commitment.
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Cars in Singapore are very expensive, so, I think leasing
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would be a better option first,
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before, having a better feel of what your finances
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Ya, it gives you time to figure things out ah.
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That's I think, that's sort of the halfway point between
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not having a car, and then owning a car which is that,
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okay la, you lease and then, you give yourself one year
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to figure out, hey is this for me, do I like driving.
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I mean the other problem with driving, of course is that
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you have to deal with all the hassle when it comes to driving la.
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You deal with traffic, you have to deal with parking, you need to
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pay your season parking, you need to top up your cashcard
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you will need to deal with traffic jam, that kind of thing.
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So, there's a lot of additional things that come with it la.
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So, there's gonna be something to consider.
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Guy's we are sgCarMart, we cannot say, don't buy car.
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No it's okay one because people will still buy cars.
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It's because we believe in honesty, we believe in being honest.
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But I mean, let's be real right, I mean
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everyone knows the sums, and the sums are very simple,
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owning a car is more expensive than not owning a car.
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If you grab everywhere, it will still be cheaper than owning a car.
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And you know how difficult it can be,
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To call a grab if you have kids, you gotta bring your own
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child seat, the driver has to
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See, so thats the buy a car argument.
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But, even if I flag down a comfort taxi, everywhere I go,
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with my kids,
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It's still gonna be cheaper than owning a car.
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The only difference is, you cannot discount convenience.
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I've got like a backpack, then i gotta carry you know, I don't know,
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stroller and all that kind of stuff,
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it's honestly a bit inconvenient, if I were to do all these
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and lug into a taxi every time I go from place to place
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so I can't discount convenience, but,
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Let's get real man, I mean, everybody knows the sums.
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Ya everyone knows the science.
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Umm, but of course if you want to find the best deals,
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sgCarMart will definitely provide you the best deals.
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Yea.. Right...
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So anyway, that's all we have for today episode of
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Backseat Driver, today we just talked about
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Umm
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Buying vs Leasing, we did digress a little bit but I think
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it's something that you guys should also find out a
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little bit more, you guys actually know,
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If you wanna know more about all these, you can actually
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hop on to sgCarMart's article section on the advise tab,
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we actually talk a little bit about renting and leasing a car,
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or buying a car. What are the sums, what you need to know
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What do you need to prepare
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Uhh, yes, please don't forget to like and subscribe
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to out YouTube Channel and please do comment in the
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comment box below and let us know whether or not you
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will buy or lease a car.
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Also, please follow us on TikTok @sgCarmart
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In the meantime, stay safe, be well, bye bye
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