Most drivers have driven a hire car at some time—either while their own car underwent extensive repair or was off the road after an accident, or while on holiday or business trips. But have you ever thought about the option of long term car hire as an alternative to buying?
Which option is best for a visitor planning a six-month or one year stay in Australia? Is it better to hire, or to buy with plans to sell the car at the end of your stay? Could a hire agreement economically fill a special medium-term need, such as a need for a seven-seater to accommodate your expanded family while hosting an overseas visitor?
|To find the right answer, you need an accurate comparison of costs. State Roads and Motoring Associations can provide details of the true total cost of car ownership, including depreciation, repair and servicing, insurance, finance costs, and other hidden costs. The figures can be surprising! With deep discounts on offer for long- term car hire, you may find the cost of hiring competitive in some circumstances.
The major advantage of hiring is that you escape most of the worries of ownership. If the car displays disturbing signs of imminent mechanical failure—or if the air conditioner breaks down—you simply return the car to its owner for remedy or to exchange for another.
Car hire also offers excellent flexibility. Need a larger car for few weeks while the relatives are visiting? Simply exchange your hire car and pay a small fee for the additional convenience.
Before deciding to hire for a longer term, though, do some careful sums to compare the costs of buying a used car and reselling later. A used car might depreciate very little over a six to twelve month period of ownership —especially if you are a sharp negotiator and can buy at a good price. If you choose a car in good mechanical order, with good tyres, you may find that very little needs to be spent to maintain it. Registration, insurance, minor servicing costs, and a $500 or $1000 loss on resale might total considerably less than a long term hire fee.
In Australia, hire car companies are quoting rates of $800 to $1000 per month for six-month car hire. Additional costs may apply for insurance to cover high excesses charged if the vehicle is damaged.
Compare a $6000 hire charge with about $500 to register and insure a vehicle for six months and a loss of, say, $1000 on a $15,000 used car bought in reasonably good order. You save up to $4500. That covers a lot of repair and servicing, and if you look after the car well , you might find you lose much less than $1000 on resale. It is even possible, on occasions, to sell for more than you paid for the car by savvy buying, careful detailing before sale, making minor improvements, and choosing the right geographic location to make the sale.
You might find there is a wider choice of vehicles available in the used car market than in a hire car yard, and you won’t necessarily be charged a hefty premium for choosing a slightly larger vehicle, or a vehicle with special features—like a station wagon, panel van, or small campervan.
Hire car companies can’t always supply to your exact needs, and if you need accessories like a tow bar, roof racks, bull bar, or driving lights you might find the hire agreement quite restrictive.
Simply dropping off your car at the hire car depot minutes before your flight out is convenient, and there is always a risk that you won’t find a buyer or that you will have to reduce your price expectations to achieve a timely sale of a vehicle you purchased at the start of your stay.
On the other hand, you might find rules restrict where you can take hire cars, and impose limits on locations for pickup and returns. High premiums might apply if you collect the car in one state and return it in another.
Should you decide that buying a car is the way to go, a car broker, like Private Fleet, can help you secure the right used car—thoroughly checked for mechanical soundness and safety compliance—at an excellent price. And for visitors to Australia, they will use their knowledge and network to help you arrange finance, insurance, roadside assist, and any other services you need for an enjoyable, trouble-free motoring experience during your stay.