When it comes to starting your private hire driving business, one of the most critical decisions drivers must make is whether to lease or buy a car.
Let’s explore the pros and cons of leasing and buying for private hire driving, helping you make an informed decision based on your needs and preferences.
Why Lease is Better than Buying
Choice of car
Your dream of driving a Mercedes, BMW or Tesla is possible! Leasing allows you to try out different cars that you might not be able to afford with a downpayment. This flexibility enables you to adapt your vehicle choice based on your preferences and the demands of the private hire market.
Minimal Downpayment
Leasing typically requires only a modest upfront payment, often equivalent to just one month’s deposit. This makes it more financially feasible for people who may not have much cash.
Does not affect your Housing Loan
Leasing a car does not affect Total Debt Servicing Ratio (TDSR). If you are looking to purchase a property shortly, it is important to manage your debt as it will affect your loan amount for your house.
Maintenance Convenience
Car repairs, road tax, and insurance are usually covered by the leasing company, relieving you of the burden of unexpected expenses.
Ease to Quit
Leasing offers the convenience of returning the car when you decide to stop driving or go on a holiday. You don’t have to worry about paying for the car when you are out of action.
Private hire cars are expected to clock in very high mileage which in turn will affect your car’s resale value.
Why Buying is Better than Leasing
Overall Cheaper
Monthly payments for a purchased car are often lower than leasing, making it a more budget-friendly option for those with stable financial situations.
Owning the car allows you to customize it to your liking. Whether it’s a personalized lucky number plate, upgraded sound system, or a unique decal or wrap, you have the creative freedom to zhng your car, knowing that it all belongs to you.
Insurance Savings
It’s often cheaper to find more insurance coverage for owned vehicles. Additionally, in the event of an accident, the insurance excess and repair costs may be lower compared to leasing.
Control Over your Car
As the owner, you won’t be subject to decisions made by car rental companies. It can be quite frustrating when car rental companies call back your car to scrap, sell away to other people or decide to increase rent when the demand for the vehicle is high.
You also won’t have to face the uncertain prospects of high repair cost for dings and dents when returning the car to the car rental company.
Considerations to buy or lease a car for private hire
In the current climate where COEs are sky-high and cost of car ownership is also incredible high. It is important to make the right financial decisions to make sure you maximise your profits in driving private hire.
