# Another car thread: Rent vs Buy



## Confiture (Jan 9, 2011)

Heard an advert on the radio last night for National Car Rental where a Ford Explorer is only 3750dhs a Month over the Summer, and it started me thinking...

If that Monthly rate (even rounded up to 4k for additional driver / CDW etc.) gives you a carefree car for the Month, why buy?

The cost of buying would be:

Monthly finance
Servicing (if no service plan - eg a used car)
Insurance
Breakdown Cover
Annual registration / Tasjeel
Tyres & other wear & tear

Being a relative newcomer to Dubai, I'm not sure what values to attribute to the above, but in my head at least, it would be a pretty close race between the rent / buy options...

One additional factor would of course be that buying the car gives you an asset (eventually), but by then it's a 3/4/5 year old car, whereas renting would keep you in something fairly new all the time.


Thoughts / comments......?


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## dizzyizzy (Mar 30, 2008)

down to your personal choice. Some people just don't want the hassle of owning a car, others feel that renting is a waste of money since if you get a loan your monthly payment would work around the same and at least eventually you´ll sell it and get some of your money back. I personally feel renting makes sense only for a limited period of time, if I was planning to be here only a few months I´d rent, more than 8-10 months, I'd buy.


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## Jynxgirl (Nov 27, 2009)

Also depends on how much you drive. We have an oil chance done every month with the back and forth to abu dhabi and if had to have done at the dealer to maintain the warranty, would be quite expensive. 

The transmission happened to lock up a few months ago Handed the key over and they handed me another vehicle  It has now been 3 months, and they are waiting on parts at the dealership. If I owned, I'd been in a rental for 3 months, paying for it as doubt they would cover you to be in a rental for that long, and still making the car payments.


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## mavzor (Feb 17, 2011)

Do you like/love cars/driving?
Do you enjoy them, and the process around them?


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## Confiture (Jan 9, 2011)

Mavzor, this is exactly the dilemma! 

Short answer is yes.

I think we'll end up renting a family car - Explorer / Prado / Pajero then having a fun 2nd car like a Mustang / Porsche 996.

Would rather the car with more use is someone else's problem tbh, hence the rental option. Mrs Confiture on the school run each day in a new, maintained, reliable, covered car is peace of mind and Jynx sums up the possible scenario perfectly!


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## mavzor (Feb 17, 2011)

Buy Buy Buy!
I recently emigrated here myself, and was determined not to be stuck in an econobox rental. Especially with petrol at 1.8dhs/L, and with roads like these...

This was my top 5 list.

1: Manual

2: Powerful for its size

3: Aiming for 15-22k… 

4: Reasonably safe

5: Reliable & cheap to repair... hence likely japanese



1x 2005 Mondeo ST220 for 26k dhs.
I do so enjoy it. 

HOWEVER.

It sounds like you're not mechanically aspirational. Having had many a broken car, and loved the process, I'm a little aware that cars are not perfect unless you're buying from the showroom.

Already I can tell you I need to replace the front brake pads, and rear tires. Not to mention the disastrously leaking power steering pump (pfft who needs power steering anyway)
Looking forward to another 2k in repairs.

Mustang / Porsche 996? They're two very different cars... and very different price tags!


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## Felixtoo2 (Jan 16, 2009)

I see your point but if i was going to spend 4000 dhs a month on a rental it would neeed to be something pretty special. If you`re planning on being here for a couple of years it makes more sense to buy as you`ll have paid about 100k in rental which will almost buy a new Prado.


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## Confiture (Jan 9, 2011)

The mechanical side of it doesn't worry me, I've restored a few old Volkswagens back in the UK, and always done my own basic servicing etc. however working in the heat, and especially having my wife and kids break down in the heat DOES worry me.

That's why I'll probably get a "fun" second car for my commute to work, and the Mustang / Porsche choice is based on it being something I wouldn't / couldn't have back home. The prices are not too disimilar, with a nearly new 'stang GT V8 at around 80k, and a decent 10 year old (cheating here on the price comparison I know  ) around 90k.

I take the point about 100k over two years almost buying the car, however when you factor in the interest on the finance (current bank balance doesn't stretch to 100k  ) plus the additional costs listed in the first post of the thread, it's still not a clear cut decision...


I'm probably coming across as very biased towards renting now, but as yet, I've not heard a compelling argument as to why it's a worse option. For me, the car would be a functional "tool". Safe for the family, reliable and big enough to cope with visiting family & friends (7 seats), with any emotional "petrol head" attachment reserved for the 2nd car.


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## mavzor (Feb 17, 2011)

Mavzor said:


> Do you like/love cars/driving?





Confiture said:


> Mavzor, this is exactly the dilemma!
> 
> Short answer is yes.


...




Confiture said:


> For me, the car would be a functional "tool"



Confiture... Am I speaking with two different people?


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## Confiture (Jan 9, 2011)

mavzor said:


> ...
> 
> 
> Confiture... Am I speaking with two different people?



No, 

1 car for family (rental?), 2nd car for petrol head


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## Bigjimbo (Oct 28, 2010)

Confiture said:


> No,
> 
> 1 car for family (rental?), 2nd car for petrol head


Purely from a finance point of view, you should buy a new or nearly new Prado. Will cost less monthly then renting, and with the residual values as good as they are then you will got upto 70% of you money back. Buy pearl white, in as good a spec as your money will allow and you will get a solid reliable tool, that you can also have fun in the desert with.

With you on the 10 yr old 996 as well!


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## Confiture (Jan 9, 2011)

Bigjimbo said:


> Purely from a finance point of view, you should buy a new or nearly new Prado. Will cost less monthly then renting, and with the residual values as good as they are then you will got upto 70% of you money back. Buy pearl white, in as good a spec as your money will allow and you will get a solid reliable tool, that you can also have fun in the desert with.
> 
> With you on the 10 yr old 996 as well!


We have a Prado at the moment as a rental, and although it _looks_ nice, the drive is pretty much the same as a Hilux!! With 4 speed bumps in, and 3 out of our compound, it's a pain in the *** already - literally!! 

Good point on the residuals though. Will look into that further...

Throwing the car around the desert doesn't really appeal, so we're going to try an Explorer next.


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## Felixtoo2 (Jan 16, 2009)

If you think thats bad over the bumps wait til you try the 911 haha!


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## Lita_Rulez (Nov 4, 2010)

Confiture said:


> I'm probably coming across as very biased towards renting now, but as yet, I've not heard a compelling argument as to why it's a worse option. For me, the car would be a functional "tool". Safe for the family, reliable and big enough to cope with visiting family & friends (7 seats), with any emotional "petrol head" attachment reserved for the 2nd car.



Compelling argument ?

I have two.

1. I bought my car when I got here. After a lot (and I mean, a LOT) of soul searching (going around the same p remiss as you list here : cars I could not afford back home), I decided to go for a used Ford Explorer. 2 months of driving around Sheikh Z everyday made me rethink the whole safety issue.
I was originally here for 3 years, and my car allowance would have covered exactly the value of my loan over the period.
I have now been here almost 5 years. This means that for the remainder of the period, I have gotten the Car allowance, and haven't had to fork it out.
Over the period, I have had to pay for all the minor and less minor issues in the car. It totals up to about half of what I have made "extra" on the car allowance, so I am still definitely on the profit side of the whole thing.

2. There is no way to know what will break down in your car. You might end up not paying half as much as I did in repairs. You might end up paying 5 times as much. 

Decisions, decisions... :juggle:

.
..
...

Hey, I said I had two compelling arguments, I never said they would both help you lean one way or the other


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## Confiture (Jan 9, 2011)

felixtoo2 said:


> if you think thats bad over the bumps wait til you try the 911 haha!


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## Tropicana (Apr 29, 2010)

Lita_Rulez said:


> Compelling argument ?
> 
> I have two.
> 
> ...


There is a misconception that 4wds are safer than sedans, large sedans are often safer than some 4wds with high centre of gravity which causes it to tip over more often. 
A Prado will always be safer than a Tiida, but there is every chance that a BMW 5 series will be better off than a Prado .


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## Confiture (Jan 9, 2011)

Try this link: RESULTS | Euro NCAP - For safer cars crash test safety rating

It is European based so many models not launched there (US etc.) don't feature, but still gives a good reference point.

I remember looking at a 2002 Chrysler Voyager a few years back. These results changed our mind!!


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## mavzor (Feb 17, 2011)

IIHS vehicle ratings

ANCAP - Crash Testing for Safety.

Hope they help. Good choice on the boatager. 
I read that the brakes are from a neon. Woohoo.


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## alangs1200 (Sep 2, 2010)

The rent/lease - buy debate is a matter of understanding the total cost of ownership and then your personal preferences.

A rental company simply adds up all the predicted costs of running the vehicle (that you frequently don't think of as an owner) and divides it into monthly payments. As they are taking a risk on those predictions there is a risk premium. On the other hand, this may be balanced by the fact that they probably buy the vehicle for les than you would. But the essence is, if you buy a car that is unusually reliable for its type and/or you drive your car in a way that minimises wear and tear, then you'll possibly save overall vs. a lease. If you buy a car that is unreliable for its type and/or you have no mechanical sympathy, then you will probably spend more than the lease.

When you're adding up all your costs you should consider:
Depreciation - always the largest cost and arguably the lease visible
Scheduled servicing - too frequent with the ludicrously short service intervals common in this region
Repairs - i.e. non-scheduled maintenance not covered by warranty
Tyres
Insurance
Registration costs
Fuel
Replacement vehicle hire costs if your is off the road (and it's not covered by the warranty or insurance)
Finance costs (even if you pay cash you have the lost interest on the money or the opportunity to do something else with that money)
Your time to "manage" the vehicle

A leasing/rental company should cover all of this for you and insulates you from the risk.

It's finally worth remembering an old adage that you should own appreciating assets and lease depreciating assets. As almost evey car sold is a depreciating asset.....

For my money I'd lease - I can't be doing with the hassle of ownership. I'm lucky, I have a company car, but I'm certainly leasing the car for my wife.


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