To buy or rent a car: that is the question!

Hi,
I live in Mauritius and as per my point of view if you would be renting a car it will end up costing you a lot of money compared of buying one.

Second hand cars are not hard to find and not that expensive. Within the budget you mention you shall get your hand on a decent one.

Agree re-selling a car would not help you make a good money out of it, yet you will still benefit something while selling the car instead of nothing.

Advantage of renting one will free you from the hassle of the declaration, road tax, servicing of cars etc... At the same time all these don't cost a fortune at the end of the day.

Now referring to the fact of getting small car for rental you don't need to worry hilly roads as Mauritius is quite flat as an island not really steep roads.

If you need more help in your decision feel free to drop in your concerns

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If you are here for 3 years I would suggest buying - the maths speaks for itself really - also lots of cars easily sold and bought as expats coming and going all the time.... Renting for 3 years would cost you MORE than your average car and nothing really to show for it at the end - but depends on your finances I suppose eh?

hello,

the answer to your question I trust can be answered by a mathematical calculation

Let's say you rent a car: Assumption 1: Price for daily rental Rs 500 (a low price for a rental here)
At the end of the day: 3 years x 360 days x Rs500 = Rs 540,000

Let's say you buy a car:
Purchase price : Rs 350,000 +
Transfer cost* Rs 20,000 approx +
3 years of road tax (3 X 4000 = Rs 12,000) +
3 years of insurance approx (3 x 15,000=Rs45000) +
3 years of service approx (3 x 10,000 = 30,000)
Total cost : Rs 457000 approx

Depending on the brand and model devaluation over three years would be different but the typical devaluation figures used here is around 12% per annum, so based on this your car would be worth Rs230,000 by the time you leave.

So my conclusion:

Rent car = Rs 540,000
Buy car = Rs457,000 - 230,000 = Rs227,000

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Buy. its better n more efficient- repairs-accidents-fuelling

Thanks for the detailed response. I had a sense the economics didn't add up for renting, particularly over a three-year period, but it's good to see the maths outright!