What are long-term rental benefits? Many people wonder about this. Long-term car rental is a formula used by the majority of medium and large companies.
In recent years, rental companies have also specialized in offering options for small and medium-sized businesses and self-employed individuals. Now, we want to summarize the benefits of long-term rental, which apply to anyone choosing this formula.
Long-term rental benefits: 7 advantages
Financial Aspects
We know that purchasing a car requires a significant sum of money. Even when choosing financing, this step is necessary. Long-term rental, on the other hand, allows you to obtain the car and related services without the need for such a financial effort, which becomes more burdensome when buying multiple cars.
The only sum to be considered upfront is the down payment, although there are now formulas emerging that do not require it. The only ongoing commitment, of course, is the monthly payment, which includes the services.
Maintenance Included
Speaking of services, it’s important to note that both routine and extraordinary maintenance is included in the long-term rental contract.
In general, the services provided are undoubtedly the main strength of the renting option. Of course, there is room for improvement in this aspect as well.
For example, in the case of companies, it would be beneficial to establish more partnerships with local garages near their offices. However, even for individuals, not having unexpected expenses, especially in these times, is a significant advantage.
Cost Certainty
Closely related to the financial aspect is the certainty of the costs associated with the car. This is a significant advantage, particularly for companies that need to determine their budget.
Having a fixed monthly installment and a set of included services makes it easier to manage and predict expenses. Whether the cost is “high” or “low,” the monthly fee remains the same throughout the rental period. This allows for more careful planning and eliminates uncertainties, such as the residual value of the car.
Simplified Management
Secondly, long-term rental simplifies car management. Companies that purchase vehicles need to allocate personnel to handle all the associated tasks (taxes, routine and extraordinary maintenance, etc.).
The same holds true for private individuals, who must remember all the deadlines and invest their time to meet their obligations. With long-term rental, all these tasks are outsourced. Those who choose long-term rental only need to worry about refueling and driving. This is certainly a benefit recognized by all types of clients.
Consultation for Car Policies
Even small companies can rely on the consulting services of the rental company to create a sensible car policy in line with their business objectives.
This is particularly important when electrifying the corporate fleet, either partially or entirely. In such cases, it’s essential to consult with experts to objectively evaluate the Total Cost of Ownership (TCO) for different vehicles.
Private individuals, through the car configuration tools provided by rental companies, also have the ability to instantly calculate the monthly fee for their desired car, including any optional features and accessories of interest. While these software tools can and should be improved, their presence already simplifies the process.
Greater Peace of Mind in Difficult Times
Even in long-term rentals, there are deductibles, or more accurately, “penalties,” which indicate the threshold below which any damage to the vehicle (whether theft or an accident) is considered the responsibility of the driver.
These penalties can be adjusted differently. Nevertheless, accidents, breakdowns, and thefts have less of an impact on those with a rented car compared to those with owned cars. In this case as well, costs are defined in advance (through the deductible), and a replacement vehicle is already included in the rental fee.
Furthermore, when a rental company operates effectively, it is always clear how to seek assistance, both for drivers dealing with an issue and for corporate Fleet Managers.
Companies in this sector have worked extensively in recent years to transform themselves from mere rental providers into true consultants.
Economic Benefits
Do all these previous advantages result in higher costs compared to ownership? Not necessarily. To answer this, you need to perform a Total Cost of Ownership (TCO) analysis, which considers numerous variables.
As we’ve seen, car rental is not just a method of acquiring a vehicle; it comprises a package of services included in the price. The monthly installment includes insurance, taxes, and maintenance, which, in the case of a privately-owned car, would constitute unexpected or extraordinary expenses. There are also “intangible” costs, the most significant being the time required to deal with all the paperwork related to the car.
To evaluate the economic feasibility, you need to consider the depreciation of the car, the annual cost of insurance, taxes, and maintenance and divide it by the contract duration (in months) for rental.
Many individual variables come into play in determining whether long-term rental is economically advantageous: how often you change cars, your average mileage, accident frequency, and your location (e.g., in some cities, auto insurance is very expensive, whereas rental costs are fixed). Nevertheless, the advantages, even when considering the numbers, are clear.
