Buying a Car Abroad vs. Long-Term Rental: What’s Cheaper?

By Samuel K. Fordham – automotive journalist, suitcase lifer, occasional spreadsheet masochist.

Travelling long-term, relocating, or taking that six-month workcation raises a deceptively simple question:

Should I buy my own wheels overseas, or just rent one for the duration?

Air-conditioned optimism says “buy—ownership is freedom!” Your bank balance, however, whispers other things at 3 a.m. Let’s pit the two options against each other, line by line, euro by peso, and crown a winner—knowing full well the real answer is “it depends, but here’s exactly what it depends on.”

1. Registration & Insurance Hurdles

Before we even get to price tags, we need to make sure you’re legally allowed to drive the thing you just spent hours haggling over on Facebook Marketplace.

The Paperwork Gauntlet

1. Residency or Address Requirements
   In many countries—Spain, Portugal, France—you need proof of local address to register a vehicle in your name. Hotels and Airbnbs don’t cut it.
   • Spain: padrón certificate from the town hall.
   • Mexico: recent utility bill in your name.

2. National ID, Tax Numbers & Local Bank Accounts
   You may need a NIE (Spain), CURP (Mexico), or social security equivalent. Opening a local bank account is often mandatory for recurring road tax debits.

3. ITV/Verificación
   That’s the local version of an MOT inspection. No valid sticker? No registration.

4. Insurance
   • Third-party liability is compulsory almost everywhere.
   • Comprehensive (“full cover”) might be overkill for a three-month stint.
   • Insurers often refuse non-residents or charge punitive rates.

Pull-quote: “In Valencia, I was quoted €1,870/year for basic liability as a non-resident—roughly what the car itself cost.”

When Rentals Sidestep the Bureaucracy

Long-term rental contracts wrap all of the above into one invoice. The plate is already registered, taxes paid, insurance logged. You show your licence, swipe your card, drive off. Simple.

But do the savings in time offset the headline rate? Bear with me.

2. Depreciation Math (a.k.a. The Silent Wallet Leech)

Even frugal buyers overlook the single most expensive line item: the vehicle’s loss in value while you own it.

Quick-fire Depreciation Calculators

• New Car: Loses 20–30 % the moment you leave the lot, then ~15 % each year.
• Five-Year-Old Used Car: Flatter curve—roughly 10 % per year.
• Ten-Year-Old Beater: Depreciation bottoms out; maintenance skyrockets instead.

Let’s crunch a realistic example in Malaga:

You’ll spend €150–250 on transfer fees, plus another €60 for the mandatory Gestor (admin broker) if Spanish bureaucracy melts your brain—as it did mine. Total immediate cost: roughly €1,800 (newer) or €700 (older) before fuel, insurance, and tax.

Put differently, a six-month rental would need to cost more than €300/month (newish car) or €120/month (beater) to be pricier than buying. Spoiler: long-term rental deals in Spain average €550–€650/month for a compact automatic.

Hidden Cost Curve of Rentals

Rentals don’t depreciate in your name, but you’re paying for that privilege:

• Peak-season surcharges.
• One-way return fees if you cross borders.
• Mileage caps—often 3,000 km/month. Every kilometre after that is €0.20–€0.35.
• Insurance excesses. One love-tap in a Carrefour carpark can swallow your security deposit.

Break those caps often? Ownership gains ground rapidly.

3. When Leasing Makes Sense

Leasing—often confused with renting—sits in the middle: longer contract (12–48 months), lower monthly rate, but you rarely own the car at the end.

Pros

• Maintenance included.
• Latest model, factory warranty.
• Tax deductions if you’re a registered freelancer or company abroad.

Cons

• Upfront down-payment.
• Early termination penalties (eye-watering).
• Residency usually required.

For a two-year stint where you need predictable monthly cash flow, leasing wins. Anything shorter and the penalty clauses devour your savings.

4. Real-World Scenarios

Case Study A – Six Months in Spain

Profile: Remote worker, Valencia, expected mileage 800 km/month.

1. Buying a 2015 Opel Corsa
   • Purchase €7,200.
   • Insurance (non-resident) €1,200/yr → €600 for 6 mo.
   • Registration fee + Gestor €250.
   • Road tax €35.
   • Expected resale: €6,500.

Total six-month cost: €1,585
Monthly equivalent: €265

1. Long-Term Rental
   • Sixt “Flex 6” €599/month unlimited mileage.
   • Deposit €300 (refunded).

Total six-month cost: €3,594
Monthly equivalent: €599

=> Buying saves €334/month, but you invest time in paperwork and risk a slower resale if the tourist market slumps.

Case Study B – Twelve Months in Mexico

Profile: Digital nomad couple, Mexico City & Oaxaca loop, 2,000 km/month, wants air-con that works.

1. Buying a 2012 Nissan Versa
   • Purchase MXN 140,000 (~€7,400).
   • Insurance (foreigner surcharge) MXN 18,000/yr (~€950).
   • Registration, plaqueados, gestoría MXN 5,000 (~€260).
   • Road tax (“Refrendo”) MXN 700.
   • Expected resale MXN 120,000.

Total 12-month cost: MXN 43,700 (~€2,300)
Monthly: €192

1. Long-Term Rental
   • Europcar “Mega Month” program MXN 18,500/mo inc. insurance.

Total 12-month cost: MXN 222,000 (~€11,700)
Monthly: €975

1. Leasing (CascoArrendadora) 24 months*
   • MXN 8,900/mo with 20 % down.
   • But penalty for breaking at 12 months: MXN 35,000.

Effective monthly for 12 months: ~€650.

Here, buying absolutely annihilates the competition—unless you fear theft or can’t stomach a half-day at the DMV equivalent.

5. “But I Don’t Want to Be Stuck Selling”

Fair point. Off-loading a car when your visa clock is ticking is stressful. You can—

• Price it 10 % below market for a quick sale.
• Use consignment lots (they take a 5–7 % cut but handle showings).
• Sell back to the dealership you bought from; expect a lowball offer.
• Hand it to a local friend with power of attorney to sell later—risky, but sometimes necessary.

Factor a worst-case scenario: you fail to sell in time and accept a 15 % loss. Run those numbers again; buying may still win.

6. Licence Compatibility & Regional Rules

Planning to hop from Spain to the UK? Don’t ignore licence limits, toll differences, and Congestion Zones. Our primer on Driving in the UK on a foreign license covers the unpleasant surprises—like £12.50/day emissions charges on older diesels.

Some rental contracts forbid ferry crossings outright. Own car? Freedom—just pay the toll.

7. Comprehensive Cost Checklist

Before you sign anything, tally every column:

Ownership Overheads
- Purchase price + one-time tax
- Transfer/registration fees
- Annual road tax
- Mandatory inspection (MOT/ITV/Verificación)
- Insurance (shop at least three quotes)
- Depreciation: expected resale value variance
- Maintenance & breakdown cover
- Storage/parking if you leave the country temporarily

Rental Overheads
- Daily/monthly rate
- Insurance excess + extra cover upsell
- Fuel policy (full-to-full is cheapest)
- Mileage caps
- Young/senior driver fees
- Cross-border fees
- Out-of-hours drop-off charges
- Potential fines forwarded with admin fees

If you’d rather not build your own spreadsheet, my quick tip: total cost ÷ months = true monthly cost. Then compare straight up.

I did exactly that in our longer cost workbook where you can copy the Google Sheet.

8. Red Flags & Pro Tips (From the Road)

• “Ex-rental” used cars are tempting—mileage is accurate, but interior wear is brutal. Check seat fabric, door seals and clutch feel.

• Ask for the libro de mantenimiento (service book) in Spain. No stamps? Walk away.

• Beware of “chocolate cars” in Mexico—imports never legalized, seized at checkpoints. Verify VIN with REPUVE.

• Leasing fine print: Many contracts forbid driving outside the country more than 30 days. Data loggers will tattletale.

• Insurance credit-card coverage often excludes rentals longer than 30 days. Split your trip into two shorter contracts if relying on this perk.

• Don’t register a car on an expired tourist visa—insurers may deny claims once they discover your status.

9. Decision Matrix (TL;DR)

10. Final Verdict

Buying a car abroad usually wins on price once you cross the three-month mark, even after adding every hidden cost you can think of. Rentals shine for true short stays, spontaneous travellers, and commitment-phobes. Leasing? A niche middle child—great for expats planting roots, terrible for nomads with itchy feet.

Data matters, but so does your sanity. If skipping the DMV queue is worth €300 a month to you, choose rental and call it self-care.

Ready to see how the numbers look for your destination, visa length, and mileage? Build a no-obligation, data-driven relocation plan in minutes—free—over at BorderPilot. Your future self (and wallet) will thank you.