Should you buy or hire a car ? Think twice before taking a car loan

April 17, 2023 By: Aditya Agarwal

When it comes to transportation, there are several options available to individuals. Some people prefer to use public transportation, while others prefer to own a car. For those who choose to own a car, the question arises whether to take a car on loan or use a hired car. In this blog, we will explore the pros and cons of each option to help you make an informed decision.

Taking a Car on Loan:

Pros:

1. Ownership: When you take a car on loan, you own the car once you have paid off the loan. This means that you can use the car as much as you want and sell it whenever you want.
2. Customization: You can customize your car as per your preferences and needs when you own it. This includes adding features like a music system, seat covers, etc.
3. Flexibility: When you own a car, you can use it whenever you want and travel anywhere without any restrictions.

Cons:

1. Cost: Taking a car on a loan can be expensive, as you have to pay interest on the loan amount, which can increase the overall cost of the car.
2. Maintenance: As an owner, you are responsible for the maintenance of the car, which includes regular servicing, repairs, and replacements. This can add up to the overall cost of owning a car.
3. Depreciation: A car is a depreciating asset, which means that its value decreases over time. This can result in a loss of value if you plan to sell the car in the future.

Using a Hired Car:

Pros:

1. Cost-effective: Hiring a car can be a cost-effective option, as you do not have to pay for the car upfront or worry about the maintenance costs.
2. Flexibility: Hired cars offer flexibility in terms of duration and distance of travel, as you can hire a car for a short duration or long duration as per your needs.
3. Variety: You can choose from a variety of cars depending on your needs, such as a small car for city travel or a larger car for a long-distance trip.

Cons:

1. Restrictions: Hired cars come with restrictions on the distance and duration of travel, which can limit your flexibility.
2. Customization: You cannot customize a hired car as per your preferences and needs, as it is not your property.
3. No ownership: Hired cars are not your property, which means that you cannot sell them or make any modifications to them.

Conclusion:

Both taking a car on loan and using a hired car have their pros and cons. Ultimately, the decision depends on your personal preferences, needs, and budget. If you want complete ownership and flexibility, then taking a car on loan may be the better option. However, if you want a cost-effective and flexible option with less responsibility, then using a hired car may be the better choice.