Renting or buying a car has its advantages and disadvantages. The peace of mind that comes from owning a car is great but the stress of high monthly payments and costly repairs can be a burden. Rented cars are great for a business traveller if the company takes care of these expenses but for those who do not have that luxury the long term payments from renting a car could buy you one.
Advantages of buying a car
1. Owning your own car is considered an asset as this means that the car can be sold at anytime for quick cash.
2. Buying a car is hassle free - the most difficult part of buying a car is securing a loan from your banker or auto dealer.
Disadvantages of buying a car
1. Cars depreciate rapidly. With every year that passes, the value of the car is lowered and thus if persons should chose to sell their cars they would not be able to recoup the full amount spent on the car.
2. Buying a car is not just a one time financial commitment; the financial obligation to the car is incomplete unless you no longer own it. The repairs to the car even if it is insured end up costing the buyer in the form of increased premiums and the maintenance can also be costly.
Advantages of renting a car
1. Reliability. Rented cars or even cars that are leased are often newer cars that still have manufacturer warranty. These usually do not incur costly repairs for the renter as they are generally in good condition.
2. Reduced financial burden. When renting or leasing, a car a down payment followed by monthly rental/lease payments are required. These payments are generally lower than the downpayment and monthly payments for a car that has been purchased.
3. High possibility of tax deductions. The cost of operating a rental car used for purposes of business is tax deductible from your personal federal income taxes.
Disadvantages of renting a car
1. Expensive in the long term. Long term car rental or leasing can see the renter paying multiple down payments over time and multiple monthly lease checks towards a car they will never own. Overtime these payments add up and can end up costing the renter the equivalent of what their own car would have cost.
2. Rental or lease contracts contain many stipulations and failure to adhere to these stipulations put forward by the renter could result in a break in the lease which could be costly for the person renting the car.