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Is it better to buy or rent a car? Which solution is more cost-effective? 

04 October 2022

Deloitte's global consumer research, conducted from September to October 2021 in 25 countries around the world, showed that most people prefer to travel in their own cars rather than use rental services. Both options have their advantages and disadvantages.  

Buying a car 

The results of a survey of 26,000 people showed that 76% of them prefer to travel by private car rather than using cabs, public transportation or car sharing services. Moreover, as many as 36% of respondents expressed the greatest confidence in car manufacturers and brands as providers of a means of transportation. Even despite rising car prices and increasing lead times. Owning a car of a certain brand gives a sense of security, and for many people it is still a measure of social status. Moreover, when buying a car, one can choose a personalized equipment option and make any modifications to it later, which is not possible with a rental. Interestingly, as many as 68% of respondents said their next new car in the next three years would be a combustion car. This could complicate the achievement of sustainability and CO2 reduction goals for the future. It's also worth remembering that buying your own car comes with a number of responsibilities, which start as soon as you purchase the vehicle.  

What are the legalities involved in buying a car? 

The purchase and operation of a private car requires the fulfillment of certain legalities, the area of which depends on national regulations in this regard. For example, within the European Union, cars must undergo periodic technical inspections. Such an obligation, on the other hand, does not exist in most territories of the United States. In general, the buyer is obliged to register the vehicle and purchase civil liability insurance, which is required by law in most countries.  

How much is the car purchase tax? 

It is also necessary to pay car purchase tax, the amount of which depends on local regulations. If the car is purchased in a country other than the one in which it is to be used, additional customs duties must be paid. If the newly purchased car is used, it is essential to start the whole procedure by checking the technical condition of the vehicle and the validity of its documentation. 

Alternatives to buying a car 

Most of these troublesome activities can be avoided by opting for a rental car. This is a convenient alternative to owning one on your own, as it allows you not to think about such mundane tasks as tire changes and maintenance. Those who use rental cars also don't have to worry about losing the value of the car or having to dispose of it in the future. In an era of reducing CO2 emissions, the use of rented vehicles and public transportation is considered the most environmentally friendly solution. This is because it reduces the number of vehicles in cities, which contributes to less air pollution. Especially since many rental companies provide electric cars that produce zero-emissions. Nowadays, you can also take advantage of car sharing or choose long-term rental, which is the closest alternative to owning your own car. 

Car rental 

More and more people are choosing to rent a car, as it is slowly ceasing to be an indicator of social status or wealth. The freedom of movement that used to be afforded only by a private car can now be obtained by minute rental. People who need to constantly travel predictable distances by car most often opt for a long-term rental, which guarantees the availability of an exclusive vehicle for the duration of the contract. Of course, such a formula also has some drawbacks. First, the range of cars is limited and there is no possibility of customizing the car. Secondly, there is a contractually defined mileage limit, the exceeding of which is associated with additional fees. Furthermore, a rented car is often not permitted to travel abroad. So such an option will be perfect, for example, for people who take fixed routes with limited range in their daily work. Many drivers also wonder whether long-term rental is financially viable. 

Is a long-term rental worth it? How much does it cost? 

The only costs that arise with long-term rentals are the monthly subscription and refueling of the car. The fee for the use of the rented vehicle already includes the costs associated with insurance, servicing and possible repairs, so you don't have to bear them additionally. At the end of the contract period, the car can be bought back or replaced with a new one, giving you great flexibility of choice. How much it costs to rent a car long-term depends on the specific offer, but expert estimates show that it is generally more cost-effective than buying the same model. This is especially the case when financing the purchase involves a loan, which generates additional interest costs. Renting can prove even more beneficial if one takes into account the difficult-to-estimate costs of possible repairs of an owned car. It is also often pointed out that the growing popularity of long-term rentals may contribute to the popularization of relatively expensive electric cars, which are now beyond the financial reach of many people.  

Should you buy an electric car? 

Given that most people surveyed by consulting firm Deloitte prefer owning rather than renting a car, the most favorable solution from the perspective of achieving climate goals would be to encourage drivers to purchase zero-emission electric cars. However, the relatively low ranges, the still limited availability of electric car charging points and the relatively high price of such vehicles mean that they are not considered a preferable option. As many as 20% of those surveyed expressed concerns about insufficient range, and 13% considered the high price a significant barrier. Willingness to purchase an electric car – given the price of an EV – is also largely dependent on the financial incentives offered by individual countries. In Italy, for example, 60% of people expressed a desire to own an electric car, compared to only 26% in the US.  

An alternative – EV parts made of ultralight EPP 

Knauf Industries car battery pack.
Knauf Industries car battery pack.

The key to popularizing electric cars is to lower their average price and increase their range. How much an electric car costs is mainly determined by its manufacturing costs. To this end, manufacturers are still working, for example, on more efficient battery technologies, which account for about a third of the cost of the entire vehicle. Modern technologies for the production of ultralight EPP and EPS automotive components are already revolutionizing the market, as they make it possible to reduce a vehicle's own weight, which translates into increasing the range of BEVs and lowering the emissions of traditionally powered cars. This versatile foamed material offers excellent thermal, acoustic and mechanical insulation properties. It has a shape-memory effect, so it does not permanently deform under impact, but returns to its previous form. As a result, it finds excellent application in the production of passive safety components used on the exterior and interior of vehicles. Innovative processing methods for this material have also made it possible to develop practical insulating systems for car batteries that provide effective protection for the cells against extreme temperatures and shocks. The vast design possibilities provided by EPP foamed polypropylene mean that it will find more and more applications in the construction of modern vehicles in the future. 

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