This is why many people don't buy cars.

Every time someone asks for advice on choosing a car, a heated debate erupts: Korean, Japanese, American, or European cars – which one is better? These debates are endless, with no clear winner, because everyone sees things from their own perspective.

For me, I see no reason to buy a car because I choose to rent a car, like Grab for example. Wealthy people don't need to overthink what kind of car to buy. But the vast majority with less money have many things to consider to balance the cost and the value received (actual needs) when owning a car.

Illustration.

I weighed the pros and cons of using ride-hailing services versus owning a car for the middle-class group's annual transportation needs like this:

My needs are: 100 km/month for family outings; plus 16 km for daily work commutes, 22 days/month, totaling 352 km/month for work. In total, I need to travel 5,424 km/year.

The rental price for a vehicle is less than 10,000 VND/km after deducting any promotional codes.

The total annual cost of renting a car is nearly 54 million VND.

If I were to buy a car for 250 million VND, the annual costs would include:

Depreciation of 10% of the remaining value of the vehicle: 25 million VND

Interest rate of 8% if using 200 million VND from the bank to buy a car, with a 50 million VND down payment: 16 million VND

Average fuel consumption is 7 liters/100 km, or approximately 378 liters/5,400 km. With a fuel price of around 20,000 VND, the total cost is 7.6 million VND. For city driving, a car in the A-segment should consume at least 7 liters.

Parking costs 2 million VND per month, equivalent to 24 million VND per year. I estimate parking near my house costs 800,000 VND, while parking at my workplace costs 1.2 million VND.

Bodywork insurance (1.5%): 3 million VND. If not purchased, the car owner must pay for repainting and bodywork repairs themselves. Damage to other parts of the bodywork is not covered by this type of insurance.

Maintenance and other expenses: 15 million VND. This number might seem large, but it's not. These expenses include: replacing engine oil, oil filter, air filter, mechanically worn parts, parking fees when going out, car wash, interior cleaning, civil liability insurance, vehicle inspection... That's not even considering unfortunate events like traffic violations, accidents, or water damage from flooding, which significantly reduce the car's value.

Total cost of owning a 250 million VND car: 90 million VND/year.

So, if I choose to rent a car, I will reduce my costs by approximately...36 million/year.For those who don't need to park their car at both ends (home and work), the cost of owning a car is still around 66 million VND per year.

Advantages of car ownership: Satisfies the feeling of ownership and driving. This need usually disappears after 6 months of ownership. The price is only cheap when the driving distance is 10,000 km/year or more.

Advantages of using a rental car service: Lower cost and time savings. Users don't have to drive for an average of 40 minutes per day, saving time on car maintenance such as washing, repairs, and servicing. This method also avoids costs such as fines, causing accidents to others, or serious damage to the car due to accidents. You can have a few drinks and still get home safely without worrying about penalties.

In fact, the cost of choosing my rental car was lower than 54 million VND because I mostly traveled during off-peak hours. Each trip cost 84,000 VND for an 8 km distance, and between 9 AM and 5 PM, I could pay as little as 59,000 VND thanks to discount codes.

I don't buy cars. Okay, let's say I'm a pragmatist. But I have my reasons, don't I?