With the growing fuel prices, most users are now shifting perspectives from buying cars to renting cars. It’s an easy decision to make as no one knows how long will fuel continue to be expensive. People are looking at Electric Vehicles to solve that problem. The switch from the pump to plug is still a pricey proposition as gasoline-powered cars are still the dominant players in both market share and lower price tags.
But, at least in the short term, renting a car has its advantages over buying. In an interview with Soham Shah, CEO and Founder of Selfdrive.ae, we look at how savings can be made via rentals.
We asked:
What about those who already own a car? Is renting a good alternative for them?
Yes, certainly. Given the current fuel price hike, car renting is a great option even for those who already own a car. Car renting and sharing are often seen as a better, smarter, and environment-friendlier way of car ownership.
What are 3 key savings that favor renting over buying?
Financing: With most customers, buying a new car involves securing a loan through a bank or other creditor that will extend over a certain time period and require monthly payments that go toward both principal (what they owe on the car) and a minimum of 4 percent interest. However, with car renting, this is something customers don’t have to worry about, and can have cars that suit their tastes and requirements.
Fixed Costs: Rented vehicles often have routine service, insurance, registration fees, replacement cost, and others included in the rental cost. This can save buyers 6 to 10 percent money every year against a car purchase.
Depreciation costs: People began to understand that the monetary value of a car always depreciates by 15 to 20 percent. Therefore, when you buy a car, you cannot expect to get a good return when reselling it. With a car rental, there are no such worries.
What is the market for rentals like in the UAE? In Saudi Arabia?
Economy & midsize sedans and compact SUVs account for ~80% of the combined rental and lease fleet.
What are the most common rental periods?
With car rentals, you have the option to rent a car for the day or just subscribe for a month or lease a brand-new car for a year. It’s totally flexible at competitive prices. Once your need for using the car is over, you can return it back. We have observed that 5-7 days on daily rentals and an average of 3 months on subscription are the most popular.
Are EVs, autonomous, and hybrids becoming part of rentals?
With the increase in fuel prices, hybrids and EVs are definitely making noise in the market. With the car rental segment, hybrids are taking momentum. They are not just cost-effective, but also offer great mileage and performance. In the old days, European and American manufacturers of fuel combustion cars had an edge, but the shift towards electric is reshuffling the game. Chinese and Asian players are coming up with cars that are comparable to Western models in terms of quality and also cost less. Considering that people are trying to save on costs, EVs will also become significant soon. Selfdrive.ae did launch Electric Cars, offering a Renault Zoe All Electric Car at an introductory price of 5 AED an hour with a minimum billing cycle of 24 hrs with a range of 250 km per day. Autonomous cars are still in the infancy stage with rentals.
