A detailed financial analysis of the costs, advantages and disadvantages of each vehicle ownership model
The decision between mobility and investment is a central dilemma in personal financial planning. In this context, the question of whether to buy a new car or use a car on a subscription basis becomes increasingly relevant, and understanding which is the best option for your budget requires a careful analysis of costs, usage profile and long-term objectives. This article offers a comparative and detailed analysis of both models, dissecting the financial factors involved to assist in an informed and rational decision, aligned with the principles of financial responsibility.
Cost analysis of purchasing a new vehicle
Purchasing a vehicle involves a range of expenses that go far beyond the sticker price. The fundamental economic concept here is the Total Cost of Ownership (TCO), which encompasses all direct and indirect expenses during the useful life of the asset. For a car, these costs are divided into:
- Acquisition Cost: The amount paid for the vehicle, whether upfront or financed. In the case of financing, compound interest represents a significant additional cost that must be added to the initial price.
- Depreciation: It is the loss of value of the vehicle over time. This is the biggest and most “invisible” cost of owning a car. A new vehicle can lose between 15% and 20% of its value in the first year alone.
- Annual Fixed Costs: Recurring and mandatory expenses to keep the car legal and protected. They include Motor Vehicle Ownership Tax (IPVA), licensing and comprehensive insurance.
- Variable Costs: Expenses that directly depend on the use of the vehicle. The main ones are fuel, preventive maintenance (scheduled inspections), corrective repairs (unforeseen events), tire changes, alignment, balancing and washing.
- Opportunity cost: It refers to the income that the capital invested in purchasing the car could generate if it were invested in a financial product. For example, the input value could be earning interest on a low-risk investment.
How it works and how much the car costs per subscription
Car subscription is a long-term rental service, usually with 12, 24 or 36 month contracts. In this model, the customer pays a fixed monthly fee that accounts for most of the costs associated with owning a vehicle. The central proposal is to offer convenience and financial predictability.
The subscription price typically includes:
- The right to use a brand new vehicle.
- All documentation, such as IPVA and licensing.
- Complete insurance with coverage for theft, theft, collisions and third parties.
- Preventative maintenance and scheduled inspections at authorized dealerships.
- 24-hour assistance.
The costs that are borne by the subscriber are generally fuel, payment of traffic fines and the insurance excess in the event of an accident. A crucial factor to be observed in contracts is the monthly or annual mileage limit. Exceeding this limit generates additional costs per kilometer driven, which can make the service significantly more expensive.
Direct comparison: purchase vs. subscription for different profiles
There is no single answer as to which model is superior; The choice depends fundamentally on the individual’s usage profile and financial situation. The comparative analysis must consider the following factors:
- Term of stay: For those who intend to keep the vehicle for a long period (over 4 or 5 years), the purchase tends to become more financially advantageous. After paying off the financing and the phase of greater depreciation, the monthly cost of ownership comes down to fixed and variable expenses, which are usually lower than the monthly subscription fee.
- Spending Predictability: Subscription offers superior predictability. With a fixed monthly amount, the user is protected from unexpected expenses with corrective maintenance or significant variations in the price of insurance, facilitating budget planning.
- Starting Capital: Buying a car requires a considerable initial outlay for the down payment or payment in cash, tying up capital that could be invested. The subscription, in turn, does not require a down payment, freeing up this capital for other purposes.
- Usage Profile: For those who drive within the mileage stipulated in their contracts (generally between 1,000 and 2,500 km/month) and like to change their car every one or two years, the subscription is an attractive option, as it eliminates the worry about depreciation and the used car sales process. For those who drive a lot, the purchase may be more appropriate to avoid the costs of excess mileage.
- Heritage vs. Service: Buying a car means acquiring an asset, even if it is heavily depreciated. In the end, the owner owns an asset with resale value. Subscription is strictly a service; At the end of the contract, the user does not have any assets related to the vehicle.
The decision between buying a new car or opting for a subscription service is, in essence, a financial choice that should be based on calculations and not impulses. The best option for your budget will depend on an honest analysis of your usage profile, time horizon and financial discipline. The recommendation is to use spreadsheets or online calculators to simulate the Total Cost of Ownership of the desired vehicle and compare it with the total cost of a subscription contract for the same period, including all the factors mentioned. Only with this detailed analysis is it possible to determine which modality offers the best cost-benefit ratio for your specific reality.
