Car Rental vs Car Sharing vs GrabCar — Which Is The Most Cost-Effective?
With the prices of COEs set to continue their upward trend, and relief only coming in the second half of the year (if at all), car ownership will only become even more expensive.
Given the high inflation rate and threat of a global recession, now is a good time to ask yourself if you really need to own a private vehicle. Sure, it’s convenient when you need a ride, but the rest of the time, a car is simply a drain on your finances.
Besides, there are many viable alternatives for when you need a car, from car sharing, to car rental, to GrabCar. Let’s take a look at which of these three are the most cost-effective.
Car Sharing vs Car Rental vs GrabCar
We’re attempting to compare car sharing, car rental and GrabCar, but one of these is not like the others.
GrabCar, as you already know, charges distance-based fares that in most cases would easily outstrip the cost of car sharing or car rental. However, you do not need to get behind the wheel yourself, and there are no registration fees or security deposits to put up.
Car sharing and car rental, on the other hand, are mostly catered to drivers who need a car for a few hours or have several trips to make.
These services charge per-hour rental fees or mileage-based fees that make the cost of a trip cheaper than a GrabCar ride. In return, there are stricter requirements to be fulfilled, such as requiring a driving licence, refuelling, returning the vehicle to the point of origin, etc.
Additionally, car sharing or rental also requires you to pay registration or subscription fees, as well as security deposits, depending on the platform you choose. This would mean having to deal with a higher cost of entry.
So which should you choose? Well, it depends on the extent of your needs. If you simply need to drop off the kids at Grandma’s, then a GrabCar ride would probably be the most fuss-free option.
However, if you’re planning to make several stops throughout town over several hours, it is likely that car sharing or car rental would offer better bang for your buck.
Let’s test that hypothesis with a hypothetical example.
Related: Best Car Loans in Singapore 2023
Cost Comparison: Car Sharing vs Car Rental vs GrabCar
Let’s assume that I would need a car for three hours on a Sunday afternoon (2pm to 5pm), and would be driving a total distance of 80km. How much would car sharing, car rental and GrabCar each cost?
Note that there are several different car sharing and car rental platforms, each with their own pricing policies, fees and types of vehicles. The platforms we have included are picked purely at random.
As for GrabCar, we’re going with JustGrab as it's the most economical option. Note that we have no way of inducing surge pricing, nor of accurately plotting a route that would equal exactly 80km. Instead, we’ve picked two points at random, and extrapolated the price of the trip from thereon.
S$83.60 (for 3 hours)
From S$62 per day
Tribecar Car Club
S$25.20 (for 3 hours)
S$58.20 (for 3 hours)
S$76 (total distance of 80 km)
What If You Need A Car On A Longer Basis?
If you’re in need of a car for longer than a weekend — say a fortnight or a few months — you can still try your luck at any of the several car sharing or car rental platforms.
You might need to make several bookings to secure the use of a vehicle for the entire duration, but you might not be able to have the same vehicle or model throughout the rental period.
There’s another alternative you can try: car leasing. This is the more “traditional” model of car rental where you lease a vehicle for your private use on a short-term basis.
Nowadays, car leasing operators offer lease terms ranging from one day to one month, further blurring the line with car sharing platforms.
Car leasing works just like car sharing — simply pick the car model you want, the period of lease, and pay the associated fees. Some car leasing operators offer perks such as fuel rebates and other promotions, which can help you save some money.
Car leasing is also a great way to secure a particular type of vehicle for a special occasion. For instance, many choose to lease a luxury car to spice up their wedding day.
Similarly, large families may book a seven-seater or minivan as a convenient and cost-effective transport option during festivals.
Related: Compare Car Loans: Find the Best Car Loan Rates For Jan 2023
What Should You Look Out For When Sharing, Renting, Leasing or Grab-ing?
What Is The Insurance Coverage, And How Much Is The Excess?
Source: Today Online
Car sharing platforms and car leasing operators offer comprehensive insurance packages that cover your liability as the driver of the vehicle during the period of use.
Do be aware that some of these platforms may have high insurance excess that could run up to several thousand dollars. For those unfamiliar with insurance terms, an “excess” is the sum that you have to pay before the insurance policy kicks in.
Hence, while booking a car for a weekend drive is undoubtedly convenient — you can do so in minutes online and receive instant confirmation — you should carefully check the exact benefits, coverage and terms of the insurance policy offered on your vehicle to avoid any unpleasant surprises.
Always check the maximum extent of liability you are subject to for renting the vehicle before proceeding.
As for GrabCar, there’s an option to add insurance cover for your trip for a nominal charge. You shouldn’t ignore this, especially if you do not have your own personal accident plan that can cover you in a traffic accident.
What Are You Allowed (And Not Allowed) To Do With The Vehicle?
Be aware that certain car sharing platforms are literally that — you’re sharing the use of someone else’s private vehicle. This means that there are restrictions and rules as to what you may and may not do with the vehicle.
Some common ones include not smoking, not overloading the vehicle, not using the vehicle to transport bulky items, pets, or pungent items, and not driving the car across the border into Malaysia.
There are also differing rules around when you need to refill petrol (often at your own cost), and where you can pick up and return the vehicle.
It is a good idea to familiarise yourself with the specific rules and regulations imposed by the car rental or leasing platform you are using, as not doing so may see you slapped with penalty charges, or have your deposit confiscated.
Learn About The Best Ways To Finance Your Car Ownership
Not convinced that car sharing or rental would work for you, and still bent on getting your own car? Well, in that case, be sure to read our reviews of the best car loans to get the most mileage out of your hard-earned money. Also, browse our car loan education hub for everything you need to know about financing a car in Singapore.
Cover image source: Unsplash
The article originally appeared on ValueChampion. • ValueChampion helps you find the most relevant information to optimise your personal finances. Like us on our Facebook page to keep up to date with our latest news and articles. • More From ValueChampion: • Average Cost of Car Loans 2023
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