I've had both: a purchased car and several car rentals. And I can tell you something that contradicts what most people believe: for cars, renting is better.
It's not a surprise if you understand one fundamental thing almost nobody mentions: cars depreciate. Houses appreciate.
That's why the renting vs buying decision is completely different for cars than for housing.
The key difference: depreciation vs appreciation
When you buy a car, you lose money every year. It's inevitable. A new car loses 20-30% of its value in the first year. After 10 years, it's worth a fraction of what you paid.
A house does the opposite — it tends to go up. You invested €200,000, in 10 years it's worth €250,000-300,000.
They're opposite investments. That changes everything.
Buying a car is throwing money away year after year. You can make that money last a bit longer if you maintain it well, but it disappears. Renting acknowledges that reality: you pay for use, not ownership.
My decision: renting at age 20
I had money to buy a car. It would have been used, not new, but it was possible. I chose renting. Here were my real reasons.
Insurance: the trap for young drivers
At 20, fresh off getting my license, car insurance is expensive. Extremely expensive.
Even listing my father as the main driver and me as a secondary driver, the price was high. That's money disappearing every month, without understanding why you're paying so much as a legal driver.
With renting, insurance is included. You don't negotiate, there are no surprises, no weird exclusions. It's done.
Peace of mind: worth more than the money saved
Here's what most people don't value correctly: a new car has far fewer problems.
When you rent, you always have a new car (3-4 years max). That means:
- No unexpected breakdowns (an engine fails, you spend €1,000)
- No worry that your car will leave you stranded on the road
- No mechanic visits "just for a checkup"
It might sound exaggerated, but the peace of mind knowing your car will work well has real value. It's not just psychological comfort.
The hidden costs you forget if you buy
If you buy a car, these expenses disappear from your mental radar but they exist:
- Inspections: technical checks, costs every so often
- Maintenance: oil changes, brake pads, filters
- Taxes: registration
- Repairs: when something breaks
- Insurance: which increases every year
Renting: none of these. It's all included.
It's easy to think "yes, but buying is cheaper long-term" without counting all these expenses. When you really add them up, the difference is smaller than you think.
The real benefit: I can keep investing
Here's what really matters for your financial future:
If I'd bought a car at 20, that money would be trapped. Not in the purchase (it could be used, cheap), but in continuous costs: high insurance, repairs, maintenance.
With renting, I pay a fixed monthly fee. Predictable. And money that would go to "car surprises" I can invest.
That's money going to stocks, buying more shares, compounding every year. Money that disappears if you spend it on repairs.
At 10 years, the difference is significant.
Why renting isn't "throwing money away"
People say "at the end of your rental, you have nothing." Exactly. But you also don't have a depreciated car worth 1/3 of what you paid.
With renting, the advantage is certainty + peace of mind + ability to invest the rest.
With buying, you have an asset declining in value every year.
Not comparable.
The difference vs housing
I need to be clear: this is the opposite of housing.
With housing, buying is better because it appreciates. With cars, renting is better because it depreciates.
Don't confuse the two. They're different lessons for different contexts.
So, rent or buy?
If you're young (20s), go for renting. Especially if:
- You just got your license (insurance is expensive)
- You don't have extra cash after other expenses
- You want to be able to invest the money you "save"
- You value the peace of mind of a new car
If you're older, with stable income and you can buy a good car (not used, but decent new quality) and keep it 10-15 years without stress, then yes, buying could be cheaper.
But that scenario is rare. Most people buy once, then realize costs are high, and wish they'd done it differently.
The final lesson
Car renting isn't a luxury or indulgence. It's acknowledging that cars are tools that lose value, not investments.
You pay for use. It's honest, it's predictable, and it lets you do smarter things with your money.
That's better business than owning something that depreciates every day.