Which One Should You Choose? – Forbes Advisor

Editorial Note: We earn a commission from partner links on Forbes Advisor. Commissions do not affect our editors’ opinions or evaluations.

If you need access to a vehicle for only a limited amount of time, buying a car or signing a traditional lease might be excessive. Instead, you might consider a short-term car lease or long-term rental which offer more flexible alternatives at a lower cost and with less commitment.

Here’s what you should know about short-term car leases versus long-term rentals so you can make the best decision for your needs as a driver.

Leasing vs. Renting a Car

Both leasing and renting will provide access to a car without having to go through the process of buying one. The main differences between the two are where you’ll get the vehicle, how long you’ll have it and how auto insurance will cover you.

Dealerships and leasing companies offer car leases, and they typically last for two to five years—though short-term leases are available in some cases. Keep in mind that while you won’t own the vehicle, you’ll need to purchase car insurance that includes both collision and comprehensive coverage, which will likely be more expensive than minimum liability insurance.

Car rental companies provide rentals. You can opt to rent a car anywhere from a day up to several months. If you already have auto insurance, it will likely cover the rental vehicle. However, if you don’t carry insurance or prefer further coverage, you can also get rental insurance through the company you’re renting from.

What Is a Short-term Car Lease?

A short-term car lease typically lasts for up to two years—shorter than the usual two to five years of traditional leases. Due to the shorter terms, you’ll likely end up with higher car payments compared to what you’d pay on a lease with a longer term.

If you apply for a short-term car lease, the dealer or leasing company will check your credit to determine the kind of vehicle you can access along with your interest rate. In general, the higher your credit score, the better your rate will be. Some companies offer leases to drivers with bad credit, but these usually come with higher interest rates and might require a down payment.

Keep in mind that car leases can come with several fees that will increase your overall cost, such as an acquisition fee, a security deposit and disposition fee as well as registration and title fees. Lease contracts also come with mileage limits that will restrict how many miles you can put on the car without incurring additional fees—typically 12,000 or 15,000 miles per year.

What Is a Long-term Car Rental?

A long-term car rental allows you to rent a car for several weeks or months. Unlike a car lease, a rental doesn’t require a credit check. Instead, you’ll need to provide your driver’s license as well as an accepted credit or debit card, and you typically must be at least 25 years old.

In many cases, rental companies will provide a lower rate on a long-term rental compared to a short-term one, and they sometimes also offer unlimited mileage. Additionally, you won’t have to worry about common leasing fees, though you’ll generally have to pay other fees, such as rental and local taxes, early-return fees, late-return fees and refueling fees. You’ll also have the option to add extra insurance coverage.

Some car rental companies even let drivers exchange vehicles for another model during the rental period, which makes a long-term rental a more flexible option than a short-term lease.

Pros and Cons of a Short-term Car Lease

If you’re considering a short-term car lease, here are some pros and cons to keep in mind:

Pros of a Short-term Car Lease

  • Could be less expensive: In many cases, monthly payments on a car lease are less than what you’d pay with a long-term rental, even if the lease is short term. You can use our auto lease calculator to see what a short-term lease might cost you.
  • Might not require a down payment: Putting money down (usually called a capitalized cost reduction) usually isn’t required for a car lease. However, you might have to provide a down payment if you have bad credit.
  • Wider selection: If you lease through a dealership, you’ll have a wide selection of makes and models to choose from.

Cons of a Short-term Car Lease

  • Harder to find: Most dealers and leasing companies don’t offer short-term leases, which makes them more difficult to locate compared to traditional leases with longer terms.
  • Fewer options for bad credit: You’ll generally need good credit to qualify for an auto lease—a credit score typically 670 or higher. While some companies provide leases to drivers with low scores, these usually come with higher interest rates and might require a money down. Having poor credit could also limit the types of vehicles you can lease.
  • Mileage limits: Car leases typically limit you to 12,000 or 15,000 miles per year.

Pros and Cons of a Long-term Car Rental

Here are some advantages and disadvantages to consider before getting a long-term car rental:

Pros of a Long-term Car Rental

  • Credit check not required: Unlike a lease, a car rental doesn’t require a credit check. Instead, you must provide your driver’s license and an accepted credit or debit card.
  • Might not have mileage limits: Depending on the rental company, you might be able to rent a car with no mileage limits.
  • More flexibility: Generally, you’ll pay for a long-term car rental month to month, which allows for more flexibility compared to being locked into a lease. Additionally, some companies allow you to switch out your vehicle for another model during the rental period.

Cons of a Long-term Car Rental

  • Could be more expensive: You’ll typically pay more to rent a car long term than you would to lease a vehicle.
  • Less selection: While dealers have a wide variety of vehicles available for leasing, you’ll have to take what you can get with a car rental.
  • Age restrictions: While you’ll have to be at least 18 to lease a car, you must be at least 25 to rent one.

Short-term Car Lease Options

There are two main options for getting a short-term car lease, including:

Car Dealerships

Most franchised car dealerships offer car leases—however, it can be harder to find a dealer that provides short-term leases. If you want to work with a dealer, be sure to do your research beforehand to decide what kind of car you want.

Also take the time to shop around and compare your price options from several local dealerships.

Lease Takeover Platforms

Multiple online platforms are available that help drivers who want to get out of a car lease connect with people who want to take over a lease, such as LeaseTrader and Swapalease.com. With this option, you can search through listings based on factors like car type, length of time remaining on the lease, location and how much you can afford to pay each month.

If you find a lease you want to take over, you can contact the seller, then start the transfer process through the platform.

Long-term Car Rental Options

Long-term car rentals are available from a wide variety of rental agencies, such as Avis, Budget, Enterprise and Hertz. Not all rental companies offer extended terms, though, and some might only provide long-term rentals on certain makes and models.

You can visit your preferred rental agency’s website or call a local office to check for vehicle and rental term availability.

Compare Rates and Save on Your Auto Loan

Get up to 4 loan offers in minutes at myAutoloan.com.

Source link

We will be happy to hear your thoughts

Leave a reply

Best & Lowest Rates of all online shopping Products
Compare items
  • Total (0)
Shopping cart