When it comes to owning a car in Singapore, one big decision that you would face is whether to purchase or to lease. Each option carries its own pros and cons, and the right choice is ultimately dependent on your budget, needs, and priorities for having a car. To aid you in this process, this article will compare the cost of buying versus leasing using the popular Mazda 3, and explore how factors like convenience and flexibility can also factor in influencing your decision. (Note: All figures listed are approximations and can vary based on individual circumstances.)

What’s the Cost of Buying a Mazda 3 in Singapore?

For many people, driving a car means convenience, stability and long-term savings. However, buying a car in Singapore involves significant upfront and ongoing costs.

Estimated Costs for Buying a 2022 Mazda 3 Mild Hybrid 1.5A Classic:

1. Purchase Price: Around SGD 115,000 (including COE).
2. Financing: Assuming a 5-year loan at 2.48% interest with a 30% down payment:
   • Down Payment: SGD 34,500
   • Monthly Loan Payments: Approximately SGD 1,508
3. Additional Expenses:
   • Annual Road Tax: SGD 682.
   • Annual Insurance Premiums: ~SGD 1,500
   • Maintenance: Around SGD 500–1,000 annually, depending on usage.
   • Depreciation: Estimated at SGD 12,000–16,000 annually.

Key Consideration:
While buying gives you full ownership, the hefty upfront costs and ongoing expenses can add up quickly, especially if you plan to upgrade or sell in a few years. Owning a car offers more flexibility in terms of modifications. However, selling the car when it’s time for an upgrade can be time-consuming and affected by depreciation. While ownership provides a sense of pride and control, it also comes with responsibilities like managing insurance, repairs, and resale. Increasing maintenance and repair as the vehicle ages could also be an area of concern.

How Much Does It Cost to Lease a Similar Model?

Leasing a car offers a different approach. Instead of owning the car, you essentially rent it for a set period and enjoy an all-inclusive package that covers most of the typical car expenses. Other than running costs such as petrol, parking, ERP, expenses such as road tax, insurance and routine maintenance are already factored into the rental rate.

Estimated Costs for Leasing:

• Monthly Lease Fee: Around SGD 2,200, which includes:
  • Road tax
  • Motor insurance
  • Scheduled maintenance
  • Wear-and-tear replacements (e.g., tires)
  • Annual inspection costs
  • Replacement vehicle when required
  • Emergency service assistance
  • Malaysia use
  • Unlimited mileage
• Total Cost Over 5 Years: SGD 132,000.

Key Consideration:
At a glance, leasing has a higher monthly cost, but this option comes with its unique advantages depending on your financial situation, lifestyle, and long-term goals.  It eliminates large upfront payments and the need to monitor any maintenance, insurance, and road tax renewals, which helps to provide predictable and consistent expenses.  Renting also offers the freedom to switch cars when your lease term ends, allowing you to adapt to lifestyle changes without worrying about resale value or long-term commitments. Depreciation is not your concern when renting a car. The leasing company assumes this risk, giving you added peace of mind.

Why Do Some Drivers Choose Leasing Over Buying?

Perhaps you can think of leasing versus buying like choosing between taxi rides and other public transport: Taxi rides are a premium service which would cost more, but people still use them for the added convenience, flexibility, and comfort. Similarly, leasing offers unique benefits that go beyond just cost:

Hassle-Free Maintenance:
Leasing takes care of servicing, insurance claims, and repairs, saving you time and effort.

Flexibility with Upgrades:
Leasing lets you switch to any model you prefer when the lease ends. For those who like staying up to date with the latest cars, this is a big perk. Or if you prefer to stay with your current vehicle, that can be easily renewed as well!

Predictable Costs:
With leasing, you pay a fixed monthly fee that covers everything, from road tax to insurance, so you are not caught off guard by unexpected bills.

No Depreciation Worries:
Depreciation does not affect you as a lessee. Once the lease ends, you return the car and walk away without worrying about resale value.

Great for Short-Term Needs:
Leasing works well for expatriates or individuals who only need a car for a few years and don’t want to deal with the complexities of buying and selling.

Conclusion: Buying vs Leasing – What’s Your Choice?

Whether buying or leasing is the better choice depends on what you value most. If you are seeking long-term ownership and are prepared for the responsibilities that comes with it, buying a car might be the right choice. On the other hand, if you prioritize convenience, flexibility, and avoiding the hassles of car ownership, leasing could be the smarter option. No matter which you choose, it is important to weigh the costs, benefits, and your personal preferences before making a decision.

Thinking about leasing or buying a car? Contact Prime today to explore your options and find the perfect solution for your driving needs.