Deciding whether to buy a car? Or would hiring or booking a car on demand be a smarter choice? With costs rising and lifestyles evolving, it’s natural to wonder which option fits your needs and budget. In this article, we’ll break down the costs and benefits of owning and hiring a car to see which makes more sense for you. Comparing the two can help better equip you to make a choice that works best for your situation.
How much does owning a car cost?
Car buying involves various costs that you should consider carefully. Here’s a breakdown of the key expenses into different categories:
Initial costs
The first major expense is the initial purchase price of the car. This cost can vary greatly depending on whether you buy a new or used car. Along with the purchase price, you'll need to cover the cost of registration, which is required to legally drive your car. Insurance is another significant initial expense, as you’ll need to insure the car before you can take it on the road. These upfront costs can be a large financial outlay, especially if you choose a newer or luxury car.
Recurring costs
Once you’ve purchased your car, ongoing costs become a regular part of ownership. Fuel is a consistent expense for car buyers that varies based on how much you drive and the car’s fuel efficiency. Maintenance is also necessary to keep your car running smoothly and safely. That includes regular servicing, oil changes, and tyre replacements. Repairs can add to this, especially as the car ages. Insurance renewals are another recurring cost, which can increase over time based on factors like claims history and changes in coverage. If you finance your car with a loan, you’ll also have monthly repayments , including interest, which adds to the ongoing financial commitment.
Hidden costs
Beyond the obvious expenses, car ownership comes with hidden costs that can surprise you. Parking fees can add up, particularly if you live or work in a city where free parking is limited. Also consider taxes related to car ownership, such as vehicle registration renewal fees and road tolls. Unexpected repairs can also come up, particularly as the car gets older. These expenses might require you to dip into your emergency fund more than you’d like to. And don’t forget depreciation, which, while not an out-of-pocket expense, impacts the car’s resale value over time. This loss in value can be substantial, especially for new cars.
Understanding these costs in detail can help you evaluate whether owning a car aligns with your budget and lifestyle. It’s important to consider both the immediate and long-term financial commitments involved in car ownership before deciding.
How much does it cost to hire or book a car?
Hiring a car or using a booking service like GoGet comes with its own set of costs:
Direct costs
When hiring or booking a car, the most noticeable expense is the rental or booking fee. This fee varies based on the car type, rental duration, and location. For example, a long-term car rental will cost more than renting a car for one day. You’ll also need to factor in fuel costs, as rentals typically require you to refuel the rental car before returning it. While car share services like GoGet may not charge you for petrol, you'll normally need to pay a kilometre charge (which we cover below). Insurance is also a direct cost, which might be included in the rental fee, but more coverage often comes at an extra charge.
Other potential costs
Beyond the direct costs, there are other charges that can arise. Kilometre limits can result in extra fees if you exceed a certain distance. Late return fees are another potential cost if you don't return the rented car on time. If you add additional drivers to the rental agreement, this can also lead to surcharges. Note that prices may increase during peak seasons, affecting your overall cost if you’re renting at these times.
Hidden costs
There are also hidden costs to be aware of when hiring a car. Convenience fees can apply for last-minute bookings, and some rental services charge cleaning fees if the car isn’t returned in good condition. You might also notice price differences between standard and premium rentals. Additionally, consider the cost and time required to access rental locations, especially if they aren’t conveniently located near you.
When comparing these costs to car ownership, it’s important to consider how often you need a car and what level of convenience you require.
What scenarios are each option suitable for?
To make an informed decision, it’s helpful to consider different scenarios where owning or hiring a car might make sense. Here’s how renting versus buying plays out in various situations:
Daily commute
If you commute daily, owning a car might offer greater convenience and flexibility, allowing you to leave whenever you need without waiting for a rental. It can also be helpful if you have a busy lifestyle that requires frequent, unpredictable trips or travelling long distances. If you live in an area with reliable public transport, you might choose to hire a car or use a ride-sharing service. These options can save you the hassle and cost of parking and maintenance.
Weekend trips
For occasional weekend trips, hiring or booking a car can be more economical and flexible. You only pay when you need it, and you can choose a vehicle that suits the specific trip, like a larger car for family outings or a fuel-efficient one for longer drives. Longer trips with a car higher can end up being quite expensive, especially during peak holiday times, and in some cases if you're in a touristy area it can also be difficult to book due to availability. However, this approach can be especially appealing if you’re environmentally conscious , as can reduce your carbon footprint by not owning a vehicle full-time. On the other hand, having a car readily available for road trips might be more convenient than planning ahead to hire one.
City living
In a city, parking can be expensive and hard to find, making hiring a car or using booking services like GoGet more attractive. You avoid the ongoing costs of ownership, and you can pick the exact car type you need for each trip. If you value convenience and minimal environmental impact, hiring might be the better option since it reduces the need for parking space and limits unnecessary driving.
Rural living
In rural areas, where public transport is less accessible, owning a car is often essential for daily tasks and emergencies. The convenience and necessity of having a vehicle at your disposal usually outweigh the potential savings from hiring. It’s also more practical if you value independence and need reliable transportation for work, shopping, or emergencies.
Consider your needs and priorities to determine whether owning or hiring a car is a better fit for your lifestyle.
What are the pros and cons of owning vs hiring a car?
When deciding between owning a car and hiring one, weigh the pros and cons of each option. Here’s a summary to help you compare the two based on key factors.
Advantages
|
Factor |
Buying a car |
Hiring a car |
|
Convenience |
Access to your car anytime |
Rent or book when needed (e.g. taxi or Uber) However, you'll likely face limited availability for peak holiday times for a longer trip (such as a weekend away) |
|
Cost efficiency |
Predictable costs over time |
Pay only when you need a car |
|
Flexibility |
Drive wherever, whenever |
Choose the car type for each trip |
|
Environmental impact |
Generally higher due to full-time ownership |
Usually lower by reducing unnecessary driving |
|
Lifestyle preferences |
Suits those needing constant access |
Ideal for occasional use or city living |
Disadvantages
|
Factor |
Buying a car |
Hiring a car |
|
Cost |
High upfront and ongoing costs |
Additional fees can add up |
|
Hidden costs |
Parking, repairs, depreciation |
Insurance, kilometre limits, late fees |
|
Availability |
Always available |
Limited availability during peak times |
|
Convenience |
Requires maintenance, parking, etc. |
Requires planning ahead and accessing rentals |
|
Environmental impact |
Potentially higher carbon footprint |
Lower environmental impact due to less use |
What else should I consider?
Beyond the direct costs and convenience, several other factors could influence your decision between buying a car and hiring one.
Car technology and innovation
The rise of car-sharing apps and the growing popularity of electric vehicles are reshaping how we approach car ownership. Services like GoGet and Uber offer convenient access to vehicles without needing to own one. With electric and hybrid cars becoming more common, you can choose options with lower running costs and a smaller environmental impact. These advancements make hiring or sharing a car, especially an electric car, a more attractive option. This can be particularly compelling in cities where these services are widely available.
Insurance implications
Buying a car usually means having a comprehensive insurance policy, which can be costly but provides broad coverage. On the other hand, hiring a car typically includes basic insurance, with options to purchase additional coverage. If you regularly hire cars or go for a long-term car rental, you might want to check how it affects your overall insurance costs. Some personal insurance policies might offer better rates if you own a car, while others could charge more for frequent rentals. It’s worth comparing the long-term costs of insurance in both scenarios.
Environmental impact
If you’re concerned about your environmental footprint, the decision between owning and hiring a car could come down to how often you drive. Buying a car generally leads to more frequent driving, which increases carbon emissions, especially if the vehicle isn’t fuel-efficient. Hiring a car, especially if you only need it occasionally, can reduce your overall environmental impact. If you choose to hire electric or hybrid vehicles, you can further minimise your carbon footprint.
Future needs and flexibility
Consider how your needs might change in the future – not just your current lifestyle. If you plan to move, change jobs, or start a family, your transport needs could shift. Owning a car provides stability, while hiring allows for flexibility as your situation evolves.
Decide the right road for you
Choosing between owning a car or hiring one comes down to what works best for you. It’s about your budget, lifestyle, and how often you need a car. Buying a car gives you the freedom to drive whenever you want. But it can also come with some hefty costs. On the flip side, hiring a car can save you money if you don’t need it every day – plus, you avoid the long-term commitment.
Think about the costs, convenience, and how each option fits into your life now and in the future. The right choice varies from person to person. It’s the choice that clicks with your needs and priorities.
