Buying vs renting a car in 2025: What makes more financial sense for you?

Cars (Representative)

It is more complex than ever in 2025 to buy or lease a vehicle. With higher interest rates, maintenance prices on the rise, and producers introducing fresh subscription platforms, lines become blurred between renting and owning. While car ownership remains appealing to drivers who are hungry for control and scale economies over the long term, short leases and flexible subscriptions make more sense to urbanites and remote employees.

Purchasing a vehicle: stability, control, and long-term benefit

Because you pay cash or finance, the vehicle is yours, no use restrictions, and in the long run—over five years—purchase will be cheaper than renting or leasing. For daily drivers to work or those without reliable public transportation, owning a vehicle still makes cents financially. But with an increase in interest rates in 2025, EMIs have increased, and insurance and maintenance expenses, especially of EVs, are a significant factor to keep in mind. Depreciation, mainly on mid-range models, is a drawback if you wish to switch cars often.

Renting a car: no long-term commitment, flexibility

Operators of car rentals like Zoomcar, Revv, or subscription offerings by Tata, Mahindra, or Hyundai are providing flexibility. Rental of ₹15,000–₹45,000 per month in 2025 will depend upon the car brand, period, and location. These are for those who move house often, want to ride new cars, or are fed up with keeping and reselling. With the vehicles and electric vehicles making a noise nuisance in urban spaces, not needing to "own" troubles that come with a car is a relief. But rental fees can be more expensive than purchasing a vehicle in the long term, especially if the vehicle is utilized heavily.

What's new in 2025: EVs, city policies, and lending

Even more Indian cities have been launching low-emission zones and congestion charges, where EVs are the default option. Government incentives for purchasers of EVs still apply but are being phased out. Simultaneously, short-term car rental websites are increasing their EV fleets so visitors can enjoy electric driving without needing to spend an arm and a leg initially. Banks are also tightening the auto loan requirements more in certain segments, particularly gig workers and the erratic income earners, so leasing becomes more viable for most.

So, what works for you?

Buy a car if you drive every day, plan to keep it for 5+ years, or live in a tier-2 or tier-3 city with terrible rental solutions. Rent if you live in a metro, don't drive every day, or value flexibility over ownership. Both are possible in 2025—it comes down to your life and pocket.