Buying vs. Renting a Car

This article should be beneficial to those of us who are fortunate enough to reach a point in our lives where we are considering purchasing a car. One of the most significant purchases you’ll ever make, and possibly the first of real significance. Given the high initial and ongoing costs of buying and maintaining a car, many people are hesitant to buy one. The sum of technical capabilities/advancements carried by a particular vehicle is positively correlated with its costs. Regrettably, so are maintenance costs. There are now many options to purchase a vehicle, which adds to the difficulty of the car-buying decision. 

Buying a Car

The car ownership procedure that most people are familiar with is the one that has been around the longest, which is an outright purchase of the vehicle. The advantages are as follows: Convenience: You have the freedom to drive whenever you want. Ownership: Since you bought this asset, you can sell it at any time. Since most cars do not appreciate in value (at least not in the years immediately following their manufacture date), any profit you make by selling the vehicle offsets the overall cost of the asset. Costs: Some of these costs are required, such as insurance; however, others, such as tickets or repairs/maintenance, are dependent on your driving habits and the type of vehicle.

Leasing a Car

Leasing is the next step in the ownership process, and it’s just as common as buying a car outright. While you gain the advantage of convenience in this case, you do not own the asset (vehicle), so any value that could be recovered through a sale is lost.

Renting a Car

Sharing a vehicle is the newest way to get a car. Although you do receive a modicum of convenience regarding when you drive; given you’re utilizing a shared vehicle, you’ll need to travel to an agreed location to pick up / drop off the car. You won’t have ownership rights to the asset, much as with leasing, so any profit that could be recouped from a sale would be lost. Unlike the other two choices for buying a car, this one restricts your out-of-pocket expenses to just paying for a car when you need it.

Now that you have all this knowledge on buying vs. renting a car it’s time to give us a call (888) 751-7511 on how you can save more on auto insurance and even house insurance! Get a quote now here!