| Renting | Buying | |
| Ownership (in name) | In the Car Rental company’s name
Eg San’s Tours & Car Rentals |
In the Hirer’s or Company’s name
Eg Mr Adam Smith (car held in trust for the company) or ABC Pte Ltd |
| Beneficial Owner | Car Rental Company | Company buying car |
| Certificate of Entitlement (COE) | 10 years | 10 years |
| Payment per month | Depending on type of car and period of rental | Equivalent to Hire Purchase Finance Instalment (Higher over similar period, assuming 70% financing) |
| Payments are for ? | Use of vehicle | Vehicle itself |
| Malaysia Entry | Yes | Yes |
| Option to Purchase | No | NA |
| Minimum term for new vehicle | 2 to 3 years | NA |
| Upfront Cost
(Deposit / Down payment) |
Deposit of 2 months’ rental for 2 year contract, fully refundable | Down payment of 30 – 40% of Purchase price. Remaining amount may be paid over up to 7 years through Hire Purchase |
| Penalty for Early Termination | 70% of remaining unfulfilled rental term | Penalty for early Settlement imposed by Finance company |
| Penalty for Late Payment | No interest charge if payment is late for a few days | Overdue interest charge @ 18% pa for late payments |
| Documentation | Little paper work
(Vehicle Rental Contract & Schedule) |
More paper work involved
(Sales Agreement & Documentation, Hire Purchase Agreement and LTA Transfer Form) |
| Transfer Fee | No fee when there is a change of Hirer | LTA Transfer Fee of S$11 (Estimated) when a change of name is required |
| Upgrading | Upgrading is possible by paying the difference in rental (Based on availability) | No upgrading |
| Variety | New of Different car possible after each contract | None |
| Payment of Road Tax, Insurance, Servicing & Maintenance, Spare Parts, Inspections etc | Borne by Rental Company | Borne by Owner |
| Convenience | Repairs, Accidents, Servicing & Emergencies attended to by Rental Company | Repairs, Accidents, Servicing & Emergencies are Owner’s responsibility |
| Accidents / Damage to car | Excess Liability with valid IDAC accident report
Administration & Repair by Rental Company |
Owner’s responsibility |
| Replacement Vehicle | Yes | No |
| Risk of Vehicle’s future Resale value / Depreciation | Borne by Rental Company | Borne by Owner |
| Getting rid of vehicle | Return car to Rental Company at the end of the contract term | Scrap, Trade in or Sell Car |
| Balance Sheet / Tax Advantage | Expense | Asset |
| Depreciation | NA | Highest within the 1st 5 years |
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