As with any other big expense, choosing the right car all comes down to budget and what your specific transport needs are. While public transport in SA is not yet at the high standard most of us want, small improvements are being made. In many ways, we have entered a ‘personal transport age’ where consumers increasingly have more options available to them.
The trick is to figure out which option is going to work for you: buy, lease, or Uber. Below we have listed the pros and cons of each, as well as some points you’ll want to consider before making your decision.
Uber
Uber has quickly become one of the most popular ride-hailing services in SA. The flexibility and reliability of the service has ensured its success. But is it a realistic alternative to having your own vehicle?
Considering the distances many South Africans travel on a daily basis, Uber is not a realistic alternative for most of us, as it is too expensive when you use the service once or more per day.
It could, however, be a good solution for one-car families when you only occasionally need to make use of additional transport.
Uber Pros:
- No upfront investment needed – it’s all pay-as-you-go
- You can hail a car anywhere and anytime it suits you
- It’s cashless as all transactions are online
- The service has proved to be safe and reliable in SA
- You can share trip details with friends or family, which adds another level of security
- Flexibility without any commitment
Uber Cons:
- Longer Uber trips (over 10 km) can become quite expensive.
- You can only order an Uber if you have funds available in your account.
- Careful budgeting is needed – just a few extra trips in a month can leave you stranded if you run out of funds.
- You need cell phone data and reception to order an Uber. If your phone battery has died, you’re stuck.
- If you’re using Uber on a daily basis for work and errands, it can quickly become a very expensive means of getting around.
- While Uber has a good reputation, at the end of the day you are still getting in a vehicle with a stranger. There is always some risk.
Vehicle Leasing
Leasing a vehicle has long been an option around the world, but in SA it has only become a true alternative to buying a vehicle over the past few years. The local vehicle lease market is growing, especially in the business sector, but isn’t growing as quickly as a private-use option.
Again, choosing to lease rather than buy depends entirely on individual needs and preferences.
Leasing Pros:
- You get a new car every few years and you’ll probably be able to drive a slightly more expensive car than you’d be able to afford.
- The resale and devaluation costs are not your problem.
- You can usually cancel a lease agreement early, but it depends on the cancellation terms of your specific contract.
- No down payment is necessary.
- Depending on your lease, it is possible that service costs may be included.
Leasing Cons:
- Leasing contracts are, understandably, very strict. Late payments or one missed payment will result in the vehicle being collected immediately.
- General wear and tear can result in fairly large additional charges.
- You will be charged to repair any minor scratches, dings, or interior scuffs at the end of your lease – these costs can often come as an unpleasant surprise.
- You have no equity in, or ownership rights to, the vehicle.
- Most lease contracts only allow for a certain number of kilometres per month/year. You need to ensure your contract suits your driving needs because exceeding the specified kilometres can result in steep penalties.
Vehicle Ownership
Out of three options, vehicle ownership is still the most popular choice in South Africa. Whether it’s the freedom of choice or the feeling of ‘success’ when you buy your dream car, vehicle ownership in SA is still something we strive toward.
Ownership Pros:
- Once you own a car (and especially if it’s paid off), it is your property and you make all the decisions related to the vehicle.
- You can keep it for as long as you want, or trade it in whenever it suits you.
- Unlimited mileage and usage.
- It’s always available to you – you don’t need to order it or make sure you have enough data available to book it.
- Small scratches or dings can be repaired when you can afford it.
- You can add accessories to suit your lifestyle.
- You can personalise your car to suit your needs.
- You can trade it in, or pass it on to a family member when you decide to purchase a new car.
- Everything you spend on your vehicle – from monthly instalments to repairs – is money spent on a vehicle that you own.
Ownership Cons:
- Upfront investment/down payment is needed.
- Maintenance and services are your responsibility.
- All vehicles devalue in price.
- Most of us can’t afford to trade our cars in for a new model every few years.
- If your service plan or warranty expires, you will need to carry the cost to either get an extended service plan or save on a monthly basis in order to pay for your annual vehicle service.
Whether you opt for Uber, lease or ownership, our advice is to do plenty of research. Speak to industry experts for advice and be very realistic about your transport needs so that you don’t end up stuck in a contract or financing situation that doesn’t work for you.
Source: Henno Havenga (www.wheels24.co.za)