Car without depreciation is music to piano teacher’s ears

SINGAPORE – Mr Nikos Tan has owned several cars, including a Mazda, two Lexus models and a couple of Volvos. But the 37-year-old piano teacher, who runs his own music school, never quite got used to the hefty depreciation each car incurred.

He cites the case of one new car which he bought for $165,000 a few years ago. It fetched only $99,000 when he sold it after 19 months because it was giving him endless problems.

“That’s equivalent to a depreciation of more than $3,400 a month,” he says. “I might as well lease a car.”

Indeed, that was the last car Mr Tan purchased. He turned to leasing his next car, a high-powered Volvo S60 T8, one of only three in Singapore. Then, in 2024, he switched to an electric Polestar 2 Long Range Dual Motor.

While the monthly lease for the Polestar is “slightly more than $3,400”, Mr Tan does not have to part with the mandatory down payment for hire-purchase cars. That sum would have been more than $100,000 for his car.

If invested, that amount would reap him close to $50,000 in 10 years – at a conservative annual return of 4 per cent. Plus, with leasing, he does not have to pay for expenses such as loan interest charges, road tax and insurance.

The electric vehicle’s (EV) maintenance is also free and even covers wear-and-tear items like tyres.

To Mr Tan, the sweetest part of a lease is the absence of downtime. “When you make a service appointment (with car leasing company Wearnes Leasing), it even comes to pick up the car from you,” he says. “And there is always a courtesy car on hand.”

To someone who runs his own business, “downtime is a no-no”, he adds.

“Yes, you end up paying more in a lease than a hire purchase – especially if you keep the car for a long time. But a lease comes with convenience and peace of mind,” Mr Tan says. “I’m thoroughly enjoying the experience.”

He says the Polestar 2 has been mechanically problem-free so far. When he started the lease, the car was around two years old and had clocked some 49,000km (the previous lessee drove regularly to Malaysia).

In the two years since he has had the car, Mr Tan added 18,300km more to its mileage.

“It’s a really nice car to drive, even if the ride is a bit hard. And the sound system is nice too,” he adds. The only issue pertains to the infotainment system, which tends to be “laggy”.

The system, he points out, is five years old, and although there are over-the-air updates, software glitches still crop up now and then. He cites the system’s road speed-limit recognition, which often flashes “30kmh” even on main arterial roads.

Mr Tan seems to accept these issues as par for the course. Ditto those pertaining to charging the EV, which came to the fore when he drove up to Kuala Lumpur recently. “I had to stop for charging, and my family and I had to stand around waiting as there were no seats,” he says.

“Some EV users said I could wait in the car with the air-conditioner running, but that would have meant a longer charging time,” he says. “Others said I could actually reach KL with 5 per cent range left.

“That may have been fine if I were alone. But I was with my family. And they feel the range anxiety more than me.”

Mr Tan is married to a 35-year-old school teacher. They have an eight-year-old son and are expecting another child soon.

When in Singapore, Mr Tan charges his car at his father’s house, which is a landed property. That, he points out, is the most economical method, as the household electricity tariff is substantially lower than commercial charging rates.

Despite the limitations of EVs, Mr Tan says he will likely lease another one. “My wife and my dad have commented that the Polestar 2’s second row is a bit tight,” he says. “So, I might get the bigger Polestar 4 next.”

Leasing does come with some restrictions. For instance, even the slightest modification to the vehicle is not allowed. But Mr Tan is fine with that.

“I used to do quite a bit of modifications to my previous cars, but my dad always said, ‘You’re spending money only for the next owner to enjoy’,” he says with a chuckle.

“I used to spend three to four hours washing and polishing my car,” he added. “Now, I spend only an hour or so.

“My perspective on cars has changed since becoming a dad. A car should serve you – not the other way around.”

What’s in the boot?