An unexpected journey that requires us to own a car. The need to have an additional van that serves your company and the services you provide. The car becomes a necessary and indispensable element of our lives, facilitating and enabling both everyday and professional activities.
However, what happens when our financial situation and income do not allow us to buy a car? In such a situation, are we condemned to travel by public transport or trains?
Fortunately not. Long-term car rental allows you to use the vehicle at a much more attractive price for us, for a limited time indicated by us. So if you are looking for a way to get a car, see what long-term rental is and what are its pros and cons.
Is this form of rental profitable? What are its threats? What to look for and what are the most important disadvantages you need to know before you decide on long-term car rental? Check!
Types of vehicle financing
We can buy a new car in three different ways:
- finding and using private individuals’ offers (so-called consumer leasing). In this element, the effect is to have a car (not always with own contribution). The customer must pay installments on a monthly basis before doing so. The repayment time is usually 4 years. After the repayment of installments, the customer can: return the car to the dealer; buy and pay the last installment (about 50% of the car value).
- long-term rental, which we will talk more about below, involves paying a subscription for about 2 years of using the car. The value of this subscription includes min. repairs, inspections and replacement of parts. Therefore, the driver bears costs such as fuel or any other unplanned expenses. Importantly, the car can be used by all family members and from a utility point of view – best suited to occasional use.
- the so-called. high purchase lease – the financing person presents and transfers to a given entrepreneur a vehicle which after a certain period of time is able to buy out. From the point of view of material benefits, leasing is the most profitable (i.e. the cheapest) form of buying a car for companies.
Long-term car rental, i.e. …?
To buy a vehicle we often decide to take a loan . Paying installments can be not only problematic, but often impossible. Loan installments often burden our finances, reasons the spiral of debt and, as a last resort, huge problems. As you can guess, when renting cars this stage and aspect is completely omitted.
What’s more, the offers do not require payment of own contribution, and often the offers require paying only the car’s value contributions or paying a permanent subscription. For obvious reasons, this is an attractive solution for people who have a limited budget. Importantly, car hire must have a minimum period of 24 hours and is different from popular leasing.
Leasing and long-term car rental
Long-term car rental has a minimum period of 24 hours. The person deciding to rent must accept the rules of the rental, which of course varies depending on the company you ultimately decide on. Before you sign the regulations, remember to read them carefully, because the document often contains information about fees associated with additional services that are not part of the basic rental packages (e.g. chain wheel when going on vacation in the mountains).
When renting, you have to pay extra fees if the car is damaged. Remember that the car you currently have must be looked after and cared for by you. If you use it excessively and you do not take care of such elements as e.g. fluid replacement, you will be charged additional fees. In this case, it is good to pay attention to the so-called Annex to the contract, which may possibly protect us from unexpected costs.
Increasingly, in terms of the above information, it is emphasized that renting a car is a more advantageous option than leasing.
Using e.g. leasing calculator, comparing offers, the question arises whether it really is so?
To better answer this question, let’s specify what leasing calculator is and what this form of service is about. The calculator presents us with the best offers according to our inquiry, calculating installments and all conditions, presenting the given offer.
Leasing itself is a type of lease, where you sign a contract for a specified period. Importantly, the agreement also sets the installment repayment schedule that is imposed by the company. Following this information – at the expense of the entrepreneur becomes a monthly installment, which ultimately leads to the purchase of the vehicle. In the case of long-term rental, it is possible to replace the vehicle even after 2 years of use, and the vehicle itself is not bought after the rental period. Simply put: leasing leads to a situation in which after repayment of installments you become the owner, and renting allows you to voluntarily change vehicles without buying them.
- returning the car and replacing it with a new model;
- returning the vehicle to the company;
- buying a car at market value.
The conclusion is that leasing pays off more, but it binds us for longer. In addition, it is a great solution for companies that want to buy a car for their own use. Car hire allows short cooperation and is a great solution for people who do not travel too often and looking for a vehicle for everyday use. These values and advantages contribute to the growing popularity of car rental, which is slowly replacing traditional leasing. Proponents of shorter obligations are much more likely to use the lease, without increasing their income. As always, you should thoroughly search the services that companies offer to choose the best offer and without hidden costs.