The car leasing process is quite straightforward as the rates provided usually include all necessary expenses that come with maintaining a car.

When comparing offers, look out for these things:

1. Mileage

An average driver travels 20,000 to 25,000km per year in Singapore. So if you are getting a 3-year-old car with significantly less than 75,000km in mileage, you are getting a good deal.

Why is this important?

The mileage determines the ride quality of the car and possibly how much ‘trouble’ you will get it. A worn car will ride a bit harsher, be less quiet, and vibrate/shake more as the car is worn out. Furthermore, worn cars need to spend more time in the workshop since the car requires major servicing when there is higher mileage on it.

2. Age of car

The age of the car will strongly influence the final rates of leasing the car. For example, the ‘younger’ the car, the higher the price of the car, thus the higher the value of the eventual leasing rate. Understanding these factors will greatly help you find the ideal car for your budget.

The registration date of the car (age) will reveal the original price of the COE that is pegged to the car. When COE is low, car prices are naturally low as well. Correspondingly, you can expect leasing rates to be low too.

Certain manufacturing years are more popular than others and might command a higher price to lease. For example, the 2005 Honda Civic* comes with side and curtain airbags. This is an important safety feature for some customers. (*Functionality depends on specific configurations in each region)

The world economic situation will also affect leasing rates. When there is a global economic downturn, interest rates go up and increases the price of cars. Leasing rates increase as a result.

The condition of the car due to the effects of wear and tear can also affect the price of leasing.

Drive.SG’s take: In the end, your budget determines how new a car you will be able to lease.

3. History of leasing company

One major consideration when choosing to lease a car would be to find the right leasing company. Look into the company’s history to predict their reliability. If you are unfamiliar with the administrative aspects, you can only be assured of round-the-clock reliable support with more established companies.

An established leasing company will provide better quality service and may have additional services for your convenience. For instance, you might be able to upgrade your car (for a nominal fee). Or even opt to change cars before your lease is due.

By contrast, “mom and pop” leasing firms in Singapore might not be at liberty to provide these additional services. However, many of our partners in this category offer a more personal touch together with cheaper leasing rates.

Drive.SG’s take: We believe it is more important to manage your expectations when leasing. We frequently hear of complaints about certain car leasing companies. Both big and small companies, reputable or notorious, can be guilty of such complaints. So we advice our customers to manage their expectations when proceeding with a lease. (Do give us a call though. We will help resolve the issue any way we can)

4. Terms & Conditions of lease

Do not be taken in by low leasing rates. These usually come with stringent leasing terms and conditions, which includes:

  • Limited driving mileage (e.g. capped at 10,000km per year)
  • No entry into West Malaysia
  • No additional named drivers
  • No replacement car in the event of an accident or required servicing
  • High security deposit (e.g. 20% of contract value)
  • Heavy penalties when you terminate your lease early (e.g. 200% of the remainder of contract value)

Drive.SG’s take: You get what you pay for. If you do not need additional named drivers (and other perks), why pay for it?

So by now you would have a working idea of how car leasing works. Have you decided on leasing a car then? Head on over to our long term leasing page to send in your quotation! 

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