Car Leasing: Things to Consider Before You Sign
Are you thinking of getting a Private Hire Car Driver’s Vocational License (PDVL), or planning to rent a car momentarily for convenience? There are plenty of reasons, as there are options for leasing a vehicle. After all, it is a rather attractive and perfect solution for those looking to drive for a couple of years.
The best part? You get to own a car, for the time being, without having to break a bank for the initial cash outlay of buying one. While there is a surplus of car rental companies in Singapore, being presented with too many choices and package deals can be a handful to deal with.
To help you make a more informed choice, and hopefully, without any regret, we’ve come up with four general things to think about before you sign a leasing contract.
1. Insurance excess and collision damage waiver (CDW)
The title alone sounds complex, however, to put it simply, it is an add-on option that car rental companies offer to reduce the amount you are liable for, in the event of an accident. The liable amount, which is known as an insurance excess, is imposed on the policyholder, should a claim be made against your policy.
CDW provided by car leasing companies typically covers damage costs to the rental car, from the bodywork to the entire repair costs, depending on the policy. Therefore, it is vital to keep a lookout for ridiculously exorbitant insurance excess, as the amount you’re potentially paying for could consist of hidden costs that are not stated upfront.
While most car leasing companies in Singapore don’t impose a mileage limit for general vehicles unless you’re planning to rent an exotic car, it never hurts to ask about the cap for your vehicle, should it be included in your car leasing contract.
Typically, the mileage cap ranges from 12,000km to 15,000km per year, depending on the limit imposed by the rental dealer. It is good to take caution, as it’s easy to underestimate the mileage requirement and end up forking out more for exceeding.
3. Add-ons, hidden costs, and warranties
When it comes to purchasing something, every buyer’s nemesis is this thing called “hidden costs”. Hidden costs are unforeseen expenses added on to purchases, and more often than not, we end up paying more when we could bargain.
Some companies may not disclose other add-on fees from the get-go and only provide the base releasing rates. Another important consideration is the warranty. It’s crucial to understand the warranty coverage and liability in the event of an accident. Additionally, keep an eye out for other fees, such as road taxes, excessive wear and tear costs, early termination fees, and any hidden costs.
4. For Private-hire Vehicle (PHV) driver: Incentives
If you’re looking to lease your car for PHV purposes, there are various long-term car leasing packages and attractive deals that you can explore. Some incentives are seasonal and only offered for a period of time, hence, it’s good to do some homework. Whether it’s to read up on the company and its latest promotions or to call and chat with a sales consultant, getting incentives like petrol discounts or insurance coverage are beneficial for your rental vehicle and wallet.