The Car Dilemna for Expatriates and Digital Nomads
The question “Should I Buy a Car” in the Middle-East does not have the same outcome as in Europe.
Before jumping into the subject of buying a car, a minor disclaimer: not always you need one. While living in South-America or Middle-East, to have a car (or live with someone that had one) is inevitable in some cities, here in Eastern Europe it is not really a must. At least not in the main cities and not for most of the people. This is one of the main points I made in my second book, Budget Travelers, Digital Nomads & Expats: The Ultimate Guide: 50 Tips, Tricks, Hacks and Ways. It is as well a common doubt of the clients of my consulting firm.
However, in some places, it is nearly essential.
Previously I mentioned the Middle East. While living there, in Doha, there was no underground (or subway, as Americans say) available.
The excruciatingly hot temperatures for three quarters of the year and the common absence of sidewalks turned walking into an unpleasant adventure. Therefore, going to work by car was inescapable for me.
But still, I didn’t want to buy an automobile. I was not even sure yet that I would stay in Qatar long enough to compensate for buying it. What if months later I left and needed to sell the vehicle in a hurry, for ridiculous price?
The solution to this question was just in the next door of my apartment. I entered an arrangement with my flatmate where I paid for part of his fuel, and he took me to and from work. To go to other places I simply used ride-sharing applications.
The monthly expenditure in this arrangement was far less than the cost I would bear if I bought a car. Especially because I was not doing long car trips, but only to downtown or to the airport. Therefore, even the taxi fares were small.
If you don’t have a flatmate to do this kind of deal, there are still alternatives to save you a considerable amount of money.
The first one is to count on ride-sharing apps and taxis. In Chile, I could go walking to my work and public transport was easily available, as in Poland.
So, when I really needed a car, I called a driver using any phone app. Since my usage was sporadic, the expenditure was smaller than the price of car insurance, for example. If you are not a frequent-driver, odds are that you will save money by using ride-sharing apps like Lyft or Uber.
The other alternative is to simply rent a car.
When you rent instead of buying a vehicle, you will have a series of benefits that most expatriates forget:
● Not paying insurance, since it is already insured
● Not paying for bureaucratic procedures like document transfers or inspections.
● Not paying for maintenance (unless specified in the rent agreement).
● Not having the cost of depreciation. A standard car will have a remaining value close to 40% of its price after three years (assuming 16,000 kilometres/year). In other words, you will have lost around 60% of its value at an average of 20% per year.
● When leaving for holidays, you can give the car back instead of paying rental during the time out. Or you can sub-rent it if your agreement allows it.
● Some rental companies include in their prices free change of tires and oil.
● Some rental companies cover government taxes for car ownership.
● If you need to leave the country for an unexpected reason, you don’t need to rush selling your car for a ridiculous price. This is often one of the biggest losses that I saw expatriates bearing when leaving the Middle East for unexpected reasons. If your company finishes your contract, you may have as little as 1 month to leave, and this is often not enough to find a buyer for a good price.
When someone says that paying for car rental is to lose money for nothing, often they are forgetting all the reasons above. In various occasions, to rent instead of buying is to save money.
On the Internet, there are plenty of cheat sheets to help calculate what is more beneficial to you. Visit some of them and do a simulation with your numbers. You might be surprised about how renting a car (or use ride-sharing applications) can be more economical.
Author: Levi Borba, founder of Colligere Expat Consultancy, former RM specialist for the world´s greatest airline, writer of the books Moving Out, Living Abroad and Keeping Your Sanity and Budget Travelers, Digital Nomads & Expats: The Ultimate Guide. You can check some of his articles here.
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