Renting vs Buying a Car

shuffles03

Hey everyone,

I live in Spain (Irish) and have a question about cars (you guys are always very helpful here).

Ive been renting a car through the bank here in Spain for the last 4 years (two different cars, two years each time).

My second rental period ends in a few weeks and I’m debating whether to buy a car or rent again for another two years.

My cars have been rented through the bank directly by the company I work for, they pay the IVA (sales tax) and the monthly rental comes out of my salary (€270/month).

This €270 includes the rental of the car, tax and insurance and I get 15,000KM a year which has worked out perfectly. If anything ever happens (and unfortunately it did once), I call the bank and they arrange the repairs at no extra cost.

At the end of the two years, the bank sends out a new list of cars and the process repeats.

As someone who isn’t into cars that much, it’s been phenomenal to be honest.

However, I am currently torn between renting again for another two years or taking out a loan with the bank to get a new car (Toyota Yaris 1.5 Hybrid Electric) for €20,500.

The reason I’m mentioning a new car and not a used one is because used cars are really expensive here in Spain. You won’t get a car for €10,000 and if you do, it’ll be really old with huge mileage.

As an example, I search for used Seat Ibiza’s and a 2017 Ibiza (which is not too old) is €16,000 whereas, a new Ibiza is just a few thousand more. At that point, I may as well get the new one with the extended warranty?

I have €10,000 in savings but don’t want to use that on a car. Took a while to save it and want to keep building my savings.

Where I live, I need a car. I’m not in a major city and need to commute to a nearby town everyday. The drive is only 20 minutes but public transport is pretty much non-existent.

I was with the Toyota dealer today, looking at the Yaris and he also mentioned that starting in January 2023, all major cities and towns will be enforcing no drive zones for non-eco cars. Got me thinking, if I bought a used Ibiza and financed it over 5 years, it probably wouldn’t be a good idea.

I view a car as a service I suppose, I don’t really have aspirations to own a nice or flashy car.

Based upon that, I’m leaning towards renting again but kind of torn.

Part of me thinks that the money I pay each month performs the perfect service I need and if there’s ever an issue, a quick call fixes everything. But also, part of me thinks that after 4 years of renting, I have no physical car to show for it.

Looking for a bit of advice.

Cheers in advance.

User1998

What type of car do you rent for €270 a month?

Seems like a good deal considering most people in Ireland would be paying close to €270 a month in tax insurance and repairs alone, and your getting a car included

Although I assume €270 a month would be considered a bit more over there as the wages are a bit lower?

shuffles03

€270 gets me a Polo, Micra, Corsa, Fiat 500 etc. €300+ gets me a Mazda 3 etc. and it goes up from there. 15,000KM/Year, 2-3 year renting.

Yeh wages are lower so it would be considered expensive. I work for a US company so my salary VS cost of living is really good.

Yeh, it’s very cheap/ hassle free.

DERICKOO

https://www.boards.ie/discussion/comment/119986773#Comment_119986773

I think that you have answered your own question.

Yeh, it’s very cheap/ hassle free.

mickdw

It's an on going 270 per month to keep a new car every 2 years including tax insurance etc.

To buy such a car, you would be looking at 270 per month for 8 years to actually own it.

You would then have your insurance and maintenance etc on top.

It's a no brainer. Stay as you are unless there is a benefit in kind tax currently that is costing you more money.