Back in the day, upgrading your family transport was limited to one or two options at the very best: buy something or maybe rent something, if you’re lucky. Fast forward to the 21st century and we have more options than ever before. Buying, renting, leasing, car sharing – or even going car free.
Faced with a decision to upgrade your family transport options, is it as straightforward as just buying something else? We look at your choices so you can figure out what’s best for you and your family.
Buying a new (or new to you) car
If you are looking to own a car, the upsides are endless; you can drive your car as much as you want, whenever you want! You can customise it how you like and it’s truly yours to do with as you wish. That means paying for the car loan, registration, insurance, fuel, and maintenance. You can get a good deal on a car – both new and used – if you are prepared to put in a bit of legwork and find information online about car loans from lenders and brokers. If it’s a car you intend to use “forever,” buying makes complete sense.
Remember the basic tips for buying a car: stick to a budget; look at safety features; time your purchase to coincide with runout sales (usually end of financial and calendar years); get loan pre-approval to establish a price limit dealers and sellers have to work with to get your sale.
Renting or leasing a car
You can rent a car for extended periods; however, costs may be calculated by the day or week and end up being very expensive. Renting may be suitable for road trips or visiting other cities where taking public transport or ride sharing isn’t convenient. In that case, you may want to lease your next family car.
Leasing a car is similar to renting or borrowing one from a dealer or finance broker for a predetermined amount of time—typically two years—while making consistent, predetermined payments. Afterward, you hand the car back for a new lease, pay the residual to own it, or walk away.
These repayments cover your leasing fees, service, registration, and maintenance costs. You won’t need to pay hundreds of dollars up front, which often includes stamp duty, registration, and the car loan deposit. Some employers may also help you out with a novated lease, which deducts the lease payments from your pre-tax income, bumping you into a lower tax bracket. Of course, since you’re only borrowing the car, you may be subject to restrictions on keeping the car in good condition and under a certain mileage.
Car sharing – a good alternative?
Thanks to the smartphone revolution, families can use car sharing for hours at a time using services like FlexiCar and GoGet. These allow you access to a car for trips across town, picking up groceries or bulky items, and other short-term uses. Sometimes, you could hire out a car for the day for day trips. The downsides are having to pick up the car from a designated drop off area, which may be few and far between in outer suburban or regional areas. If you only use a car occasionally, it can end up much more economical than buying or renting.
Can you go car free?
For some families, living car free is a viable option. Good public transportation or amenities in walking distance may discourage the need for permanent or semi-temporary access to a car or vehicle. You may need to use the occasional ride sharing service like a taxi or Uber for time critical appointments that come up, such as job interviews, school events, or medical consultations. eBikes and eScooters (or old fashioned bikes or scooters) may be a decent substitute for the car on your daily commute to work – and you may even work from home.
No matter what you choose, you need to factor in how it will affect your family. Taking three kids on public transport to their respective after school activities and collecting them might be a nightmare – and if they’re regular events, it could be as costly as a fourth kid with a fourth activity if you use ride sharing. Evaluate what’s right for you and do your homework – no matter what you choose, invest in your transportation options wisely!
