Rent, ride or buy a car?

These days, there are so many options when it comes to commuting. Changes to technology and the introduction of share economy businesses like Uber have transformed the ways we get around.

But, will forgoing buying a car actually save you money or could it end up costing you more in the long run? Here’s some information to help you decide what your best option might be.

Renting

Ten years ago, renting a vehicle in Australia was a costly and logistically difficult venture. Today, it’s easier and cheaper than ever. The convenience and ease of some car hire companies enables consumers to use a car whenever and wherever they want.

Peer-to-peer vehicle sharing businesses have taken this one step further. Car Next Door and Camplify are two such examples. Both businesses allow everyday Australians to list their vehicles online and make them available for others to rent when they’re not being used. The idea is that a vehicle can make its owner money during the periods when it would otherwise be sitting idle.

In theory this sounds great and for a one-off event it could be more cost-effective than purchasing a car. However, if you’re driving long distances for work or daily school pick-ups, you’ll probably end up paying a lot more renting someone else’s vehicle each day.

Ride-sharing

The introduction of Uber into the Australian market has rocked the boat in more ways than one. Sitting at a much lower price point than their taxi competitors, Uber boasts the nice-to-haves of a rate and review system, GPS tracking and a simple mobile booking system.

It’s never been so easy to catch a ride. But does the ease and convenience of this service make us open wallets without thinking?

A 5km trip in an UberX vehicle during an off-peak period in Melbourne costs approximately $10.13, according to Uber’s rate estimate. Let’s say you’re using Uber five times a week that works out to be around $50.

While this might not seem like much, if you did this consistently over a 12-month period you’d end up paying around $2,431.20. Over the course of five years, you’ll have outlaid $12,156 and you won’t own anything.

While ride-sharing is great for a night here and there, it’s probably not a long-term fix to commuting.

Buying

Cars can be expensive there’s no denying that. New cars depreciate the moment you drive out of the showroom and the maintenance costs continue to roll in as long as the car is still kicking. Despite all this, having your own a car brings with it a level of convenience that is hard to ignore.

When it comes to buying a vehicle, how much you want to spend and whether you prefer a new or used car, are significant factors to consider.

Similarly, whether you want to finance all or part of the purchase price is important and will determine the ongoing financial commitment you will need to make.

Like with any significant financial decision, it makes sense to get the right information upfront.

So, if you are considering buying a new or used car and need advice on financing options, speak to your local Liberty Adviser today. Alternatively, click here to learn more about Liberty’s extensive range of car lending solutions.