Thursday, March 7, 2013

Automotive Insurance Vs Leasing / Renting

I want to take this moment to point something out.

If you live in a city and don't actually drive that often you can save a bundle of money by renting or leasing... Simply because you don't to pay for insurance quite so much.

This is especially true if you are young and male.

Example - A friend of mine has his car in his wife's name just so they can save on insurance. Because it is in her name they only pay $3000 per year on auto insurance. If the car was in his name the insurance would be $5500 per year.

However lets pretend for a moment that they took the subway / TTC to work and they only drove two days per week... Well then they would save a huge bundle of money on the following things...

Auto insurance.
Car repairs / maintenance.
The cost of purchasing a car.
Renting or leasing thus can be a huge money saver.

It is true that you can later sell the car... And then buy a new one, which is another problem because then your insurance goes up because its a newer / more expensive car. If you buy a new car every 5 years you will end up spending a bundle on new cars, replacement parts, automotive insurance, repairs...

Thus if you don't really drive that often it really makes huge economically sense to rent or lease only when you actually need a car.

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