Many may opt to lease a car while others may choose to rent a car. The major difference between them is the time frame for which the car is utilized. A car is rented for a short time and when leasing a car, it is means a long-term commitment upto 3 years. When a person leases a car, they can use it as their own car given the period it is with them. This saves the hassle of buying a car and taking a loan. It is as good as owning it though for a limited period of time. When you buy a car, you’re entitled to pay additionally for insurance, maintenance and loan. However, leasing a car saves you from these additional expenses.
You can choose among a wide range of cars to lease. From economy car models to even leasing a luxury car or SUV. You can rent a car for short term basis or lease a long term car rental. Valid documentation is essential to lease a car however. If you want to rent a car, you only need a valid driving license and Emirates ID copy. Read on to know a few differences between renting a car and leasing a car
Time frame is the first and main difference between renting and leasing a car. When you lease a car, the commitment is for a long-term. This gives the liberty to use the car as per your convenience. It is similar to owning a car. However, your payment for the lease period will be settled at the start of leasing in the form of monthly payments ideally for 24 or 36 months.
Renting a car on a short term basis is an economical option too but the cost on day-basis payments generally turn out to be more expensive.
Next is the provider. Leasing is generally done by established car leasing companies, which command a large fleet or a car dealership which even sell cars. As against rent a car from small or large car rental agencies. They too own a fleet which may be a small number or in the hundreds, which are rented on a short term basis for an income. The idea of renting a car works for someone on a holiday. Another difference is about the ownership at the end of the contract. When a person leases a car, there is a possibility that at the end of the lease they can own the car a.k.a. lease to own. There is an upfront charge when a person leases a car. When the tenure comes to an end either he can stop paying or pay the amount what is required to own the car. When it’s a rental car, there is no possibility of owning the car. A fixed amount of fee is paid to use the car on a short term basis.
The fourth point of difference is the insurance. When leasing a vehicle, it requires insurance but for renting insurance is an option depending on the rental agencies. Dealers who lease cars ensure that a person has full coverage that includes benefits such as collision and comprehensive damage to protect the car’s value. When renting a car customer pays the liability that covers the aspect of their use. Certain rental agencies also offer additional insurance at a reduced price. In case there is any damage to the vehicle, it protects the customer.
Leasing a car involves monthly payment and upfront charges. A person needs to pay the monthly charges until the contract term. During the contract, a person can even choose to change the car and only pay the additional difference. A person can choose a luxury or a car to use for his or family needs. When leasing a car there is a certain mileage limit also to adhere to. If they cross the mileage there will be additional charges added at the end of the contract. When renting a car, a person generally has to pay 70% of charges for the period of time they rent and they remaining after they return the vehicle. Rental cars the contract terms cannot be modified and a person has to use the same vehicle until they return it.
These are a few differences between leasing and renting a car. When a person leases a car, the commitment is for a long term and it as good as owning a car. Rented cars are for those who plan a mini vacation, in a high commute job or for travellers who want to hire a car for a shorter period of time.