5 Things You Should Note Before Committing to a Car Lease in Singapore

Car leasing in Singapore can be a fantastic alternative to buying a car outright.

Whether you need a vehicle for a couple of years or are looking for a more flexible long-term solution, leasing might be the answer.

However, before you dive into a lease agreement with attractive low rates, there are several factors you should consider.

Here's what you need to know to make an informed decision.

Understanding Insurance Excess and Collision Damage Waiver (CDW)

When it comes to car leasing, the terms 'insurance excess' and 'collision damage waiver (CDW)' are critical.

Insurance excess refers to the amount you have to pay out of pocket in the event of an accident.

Essentially, it's the portion of the cost you're responsible for before your insurance kicks in.

CDW, on the other hand, is an optional add-on provided by leasing companies that reduces the amount you're liable for.

Depending on your policy, it can cover anything from minor bodywork to complete repair costs.

What to Look Out For:

• Be wary of high insurance excess amounts; they might be split into 'total,' 'own damage,' and 'third-party damage' excesses.
• Ensure you fully understand the terms of the CDW and what it covers.

What Your Car Leasing Package Should Include

Car leasing packages in Singapore often come with various add-ons and entitlements.

These can include roadside assistance, accident repair and claims, servicing and maintenance, and even replacement vehicles during repairs.

What to Look Out For:

• Roadside Assistance: Confirm if the leasing company offers comprehensive roadside assistance, including accident recovery, vehicle breakdown services, and towing.
• Accident Repair and Claims: Ensure that accident reporting, insurance claims, and damage repairs are covered.
• Servicing and Maintenance: Check if regular servicing and basic wear-and-tear maintenance are included. Verify which parts and repairs are considered normal wear and tear.
• Replacement Vehicle: Find out if you’ll get a replacement vehicle during servicing or repairs.
• Option to Change Car Model Mid-Lease: Some companies allow you to switch car models mid-lease for an additional fee. This can be handy if your needs change.

Ensuring Transparent Pricing and Understanding Hidden Costs

Reading the fine print in your lease agreement is crucial to avoid hidden costs.

Some companies might offer low base rates but sneak in additional fees.

What to Look Out For:

• Warranties: Understand what your warranty covers and your liabilities.
• Hidden Fees: Look for costs that aren't included in the contract, such as road tax, insurance excesses, wear and tear costs, early termination fees, and excess mileage charges.

Evaluating Mileage Limits

Mileage limits are another essential consideration.

Some leases come with mileage caps, typically ranging from 12,000km to 15,000km per year.

What to Look Out For:

• Assess Your Mileage Needs: Estimate your annual mileage to avoid extra costs for exceeding the limit. If unsure, opt for a lease with unlimited mileage.

Exploring Private-Hire Vehicle (PHV) Driver Incentives

If you're leasing a car for private-hire purposes, many leasing companies offer special incentives.

These can include petrol discounts, completion bonuses, and more.

What to Look Out For:

• PHV Incentives: Check if the car is registered for PHV use and if there are any current promotions for PHV drivers.

Conclusion

Leasing a car in Singapore can be a great way to enjoy the benefits of having your own vehicle without the hefty initial investment.

By considering these factors—insurance excess and CDW, package inclusions, transparent pricing, mileage limits, and PHV incentives—you can make a well-informed decision and avoid potential pitfalls.

Do your homework, read reviews, and choose a lease that best suits your needs.

Writer's note: Images are purely fictional; for illustration only.