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Renting or Leasing a Car in Indonesia

A variety of transportation options present themselves to newly arrived expatriates. Soon after arrival the expat family feels the pressure to make a decision on transportation as the entire family is inconvenienced by the lack of wheels! So, in the midst of the myriad of other decisions you have to make, you must quickly decide how you want to transport your family during your stay in Indonesia.

The company may provide the working spouse with a car and driver, but the family may be left on its own to obtain transportation for the accompanying spouse and children.

You could chose to buy a car and then proceed to get advice from friends on what cars are reliable and cheaper to service. Then you could spend weeks in and out of show rooms trying to find out what types of vehicles are available at what price and finally be in a position to make your decision. You may worry, as well, about the feasibility of the decision to buy a car for only a year or two. You may also worry about receiving a good resale price or it may be difficult to sell your car quickly when you're ready to leave Indonesia for your next assignment.

Another option, which has become increasingly popular in recent years, is the long-term lease of a car and driver. Leasing a car helps your family to quickly hit the ground running after your arrival, freeing up time for the other important decisions you must make.

Immediate Availability

If your office has prepared for your arrival, from day one a leased car and driver can be made available to transport you and your family. This way you can quickly tackle the other pressing needs, such as housing, schooling, shopping and getting familiar with your new home.

The leasing company will have a wide range of vehicles available for immediate rental including Japanese and European cars. You can look through their brochures and test drive the various cars to find the one that suits your family best. If you want a car that is not currently available, the leasing company may be able to make arrangements to obtain that particular car for you. Normally in order to do this there will need to be a minimal rental period that will need to be fulfilled.

The documents for your vehicle are handled by the leasing company so you don't have to worry about car registration, taxes or insurance.

Costs

The cost of purchasing a new car is skyrocketing. The rupiah/dollar exchange rate means the cost of purchasing a new car is extremely high. Due to high import tax rates, cars in Indonesia are much more expensive that in most western countries. Purchasing a used car in Indonesia has the usual uncertainties as to the condition of the engine, made even more difficult because of communication barriers with an inspecting mechanic.

The cost of automotive spare parts continues to increase. It is difficult for an individual or company to budget the maintenance expenses of a car with the continuing price increases. With a leased car, the monthly lease amount includes all maintenance costs, making it much easier to make an accurate annual budget for the costs of transportation. When weighing the factor of uncertain resale values and these other factors, you may find that leasing a car is often a less-expensive option.

Maintenance

Your leasing company should have the complete maintenance and service of your car as a feature of the contract. If the car breaks down or needs regular service, another car can be provided to you without any interruption in service. This will eliminate the worry if your driver or office staff are making a . little extra. in arranging the service or maintenance of your car. The fleets of many leasing companies are large, ensuring the best prices for spare parts as they can buy in bulk and keep regularly needed items in stock - ensuring quick and efficient maintenance services. Many leasing companies will send a mechanic to your office during the day while the car is idle for minor maintenance such as an oil change so that there will be no down time for you and the usage of the vehicle.

Drivers

Anyone who has tried to hire a qualified driver in Indonesia undoubtedly has a long saga to tell of all the drivers they had to try before they found the one that fit their family's needs. When you are trusting a major family purchase into the hands of a driver of uncertain skills, you can put yourself at great personal and financial risk.

Drivers provided by a leasing company are well-trained and experienced with a thorough knowledge of office buildings, shopping centers, international schools, hotels, embassies and tourist sites. They have been trained in common courtesies and know that their company demands certain standards of behavior from them. Depending on which company they have worked for they might also have to complete a driver certification program to ensure they know what to do in an emergency situation as well as defensive driver skills. In some cases, the leasing company will provide English training to drivers.

If your driver is sick, another driver will automatically be assigned to drive you without any break in service. If, for any reason, you are not comfortable with your driver and feel that he is a 'less than ideal' match for your needs, you can request another driver until you find one that fits your family's requirements.

With a leasing company driver you have no need to worry about salary, sick leave, vacation leave, requests for personal loans or discipline issues as all the employment-related benefits are handled by the leasing company. The only thing that you will be requested to do is to sign off on the number of hours worked that the driver will then submit to his company for payment.

Choosing a leasing company

When you speak with various leasing companies, cover the issues discussed above and you will soon get an idea of their resources and flexibility in meeting customer needs.

Ask pertinent questions like: How many cars are there in your fleet? How many drivers do you employ on a standby basis to replace a regular driver? Can you pick us up if we are stranded in a broken-down car? What insurance coverage do the cars have? Do you stand behind the honesty of your drivers - what would they do in case of theft by a driver? Can they give you referrals to current customers?

Assess the company's emphasis on service and whether or not they seek to reach a 'hassle-free' level of service for their customers. You may save money renting a car from your secretary's brother ... but you will save your family a lot of headaches by leasing from a reputable full-service leasing company.

Lease to purchase

Some car leasing companies may have lease-to-purchase plans whereby you receive all the benefits of a leased car listed above as well as backup car and driver ... yet you or your company ends up with ownership of the vehicle. Discuss this option with the leasing company to determine the benefits.

Short-term lease

There may be occasions when you need a leased car and driver for a short term:

A full-service leasing company will be able to provide a car and driver to meet these short-term needs.

 

See - Buying a Car in Indonesia

Updated June 24, 2023