Owning your own car has transformed from a luxurious want to a practical need. Having your own car can significantly improve the quality of your life. For one, you have control over your time. You do not need to wait for a bus under the sun or squeeze into the MRT. If you have toddlers and kids, owning a car is a convenience you will definitely be thankful for.
Owning a car in Singapore however, is not cheap. It is downright expensive, that even Singaporeans with a high spending power struggle with getting their own car. The ARF, excise tax and the COE are just some of the factors that add up to the price of cars in Singapore.
If you have determined that you really need a car in your life, you have two options. You can pay for it with outright cash, or get a car loan. However, you can only loan a maximum of 70% of the purchase price as set by the MAS. You must also make a deposit which is at a minimum of 40% of the car’s price.
Another option is to get a lease to own car. But how does it work?
Car Leasing in Singapore: How it Works
A car lease is a form of prolonged car rental. You can drive and operate the leased car, but it is still owned by the leasing company. You become the lawful owner of the car after you have dutifully and successfully paid all the terms. With a lease to own car, you do not need to worry yourself over the intricate purchase details. The monthly lease may also cover insurance, maintenance, road tax, and COE, which makes it more convenient.
Most lease to own car companies require that you meet the following before you get approved:
- You must be at least 21 years old.
- You must have a driver’s license.
- You must be a Singaporean or a Permanent Resident.
Steps in Getting your Lease to Own Car
If you have decided to get a lease to own car, here are some things that you should keep in mind.
- Determine your needs.
You need to decide what type of car you need to fit your lifestyle. Do you need an SUV, MPV, hatchback, or a sedan? Do you prefer a brand new car, or will a second-hand one do?
- Decide how much you are willing to spend.
It is essential to determine a price point to narrow down your many options. Why waste time looking at car deals that you cannot afford, or are not willing to spend money on?
- Inspect your vehicle.
Select and check the vehicle of your choice. Choose your colour, preferred model, and preferred transmission type. For second-hand cars, check the mileage and the condition of the vehicle.
- Pay a minimum deposit.
You need to pay a minimal deposit which is about 5 to 10% of the car’s cost. This is very cheap and affordable, compared to the minimum 40% required down payment for car purchases.
- Complete the handover process.
Before signing the contract, make sure that the following are indicated and are fully understood:
- The monthly lease amount and monthly due date
- The length of the contract
- The deposit you have paid
- Insurance coverage
- Termination penalties
- Services included such as maintenance and road-side assistance
Most lease to own car contracts last for five to seven years. After you have paid off all your monthly terms, the vehicle will be turned over to you as its new owner.
Choose Cars and Trips for your Car Leasing and Rental Needs in Singapore
Cars and Trips is your trusted car rental partner in Singapore. We have a wide range of fleet of vehicles for your specific needs. We have partnerships with other vendors to give our clients the best services that they deserve. Contact us Elaine at +65 9170 2773 or +65 9128 8.