As the landscape of car ownership continues to evolve, traditional models are giving way to more innovative solutions that provide more flexibility and convenience. The rent-to-buy car subscription model is an example of a new innovative model of ownership.
In South Africa, drivers must navigate the challenges of vehicle depreciation alongside economic uncertainty. This creates a situation where buying a car outright isn’t a realistic option as owning a depreciating asset could lead to financial harm in the long-term.
This article will focus on how services, like those offered by We Rent Cars, are revolutionising the driving experience in South Africa. We will dissect vehicle depreciation and look at how subscription and rental services mitigate the associated financial risks.
Let’s get started.
Understanding Vehicle Depreciation
Vehicle depreciation is a well-known term to anyone who has ever owned, or considered buying a car. Simply put, vehicle depreciation refers to the decline in value of a vehicle over time. There are many different factors that contribute to a car depreciating in value:
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Age of the vehicle and model year
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Mileage
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Wear and tear
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Market demand and evolution
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Economic conditions
In South Africa, the automotive market is dynamic and is influenced by external factors that directly contribute to vehicle depreciation. Unlike assets in real estate, cars lose value (rather rapidly) as time goes by, with the highest depreciation occurring within the first few years of ownership.
Vehicle Depreciation in Car Subscriptions
So, we now know that vehicle depreciation is an unavoidable reality for car owners. Leasing models, like the rent-to-buy subscription offered at We Rent CArs, mitigate some of the concerns related to asset depreciation.
One of the primary benefits offered by a car subscription is that it eliminates the risks associated with outright ownership of the vehicle. Instead, subscribers will pay a fixed monthly fee for access to the vehicle, without the burdens of ownership. This fixed-cost structure provides financial predictability and eliminates the need of eventually finding a reasonable resale value.
Additionally, car subscription services provide unparalleled flexibility and offer drivers the chance to switch to newer car models. Traditional ownership always leads drivers to hesitancy when making the decision to sell and purchase newer models.
Many car subscription services also offer maintenance benefits to their customers. We Rent Cars, for instance, offers minor vehicle services every 10 000 km for 54 months, to their rent-to-buy customers.
Unique Benefits for South African Drivers
In South Africa, there are various economic factors that contribute to heavier than usual vehicle depreciation. In a market characterised by volatility and poor decision making by national leaders, factors like inflation, currency fluctuations, and market instability all impact the purchasing power of consumers.
Additional factors like poor road conditions and high levels of vehicle theft also mean that owning a car in South Africa is a massive financial risk.
Car subscriptions thus offer a host of unique benefits to South African drivers including not having to worry about market conditions ruining the value of your asset and peace of mind when driving. In short, car subscriptions, specifically in a country like South Africa, greatly mitigate against the financial impact of depreciation and unexpected asset damage or loss.
Driving Forward with We Rent Cars
Car subscription models offer a compelling solution to concerns related to vehicle depreciation, especially in a country like South Africa where numerous external factors exacerbate the issue.
We Rent Cars offers a flexible and accessible rent-to-buy subscription that includes various extra benefits including:
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A tracking device
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Yearly licence renewal
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24h roadside assistance
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Comprehensive insurance
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Minor services every 10 000 km for 54 months
Contact one of our agents today to find out more.