Surely, on more than one occasion when you’ve wanted to rent a car, you’ve asked yourself which option suited you best.
In this Ralarsa blog article, we’ll help you choose between a leasing or renting arrangement according to your needs… If you’re still not sure what we’re talking about… keep reading!
What’s the difference between leasing and renting?
In leasing, the documentation is presented through a financing system, which amounts to a rental with an option to purchase at the end of the contract term, usually a minimum of 2 years.
Maintenance and conservation expenses are paid by the lessee. However, it is not possible to return the vehicle before the agreement ends; although, if at the end of the term the holder wishes to acquire the vehicle, they must extend the contract with new monthly payments or change the vehicle under a new contract.
This type of rental can only be offered to freelancers and companies, who do not have to pay an initial fee. In addition, the payments can be deducted from Corporate Tax or Personal Income Tax.
In renting, it’s quite the opposite. The documentation is presented as a service provision. The company’s intention is to finance goods with rapid obsolescence and complex maintenance. The term usually ranges between 1–5 years, and the holder benefits from having all maintenance and conservation expenses covered by the lessor (registration tax, road tax, full coverage insurance, comprehensive maintenance service, repairs…) and there is no option to purchase. Likewise, if the contract allows it, it would be possible (though uncommon) to return the goods before the end of the contract.
Both companies and individuals can be holders of a “renting” contract. The difference with leasing is also that payments tend to be higher but include many benefits. Like leasing, one of its main advantages is the tax benefits for companies and freelancers, as monthly installments are accounted for as expenses. Individuals, however, do not obtain these tax benefits.
Both leasing and renting are only offered for new vehicles.
Other short-term rental methods
In any case, for all those people who don’t want to rent a vehicle for a long time, but only for a few days or hours, we bring you the perfect solution.
The carsharing concept goes a bit further than what we are used to seeing, providing greater flexibility and convenience to have a rental car available in your day-to-day life. One of the benefits of this rental method is that users are not obliged to return the vehicle to a specific facility, but can leave it at any point within the city or locality where the service is available.
Once the user no longer wishes to use the vehicle and notifies their usage time, it becomes available to be picked up by another user. This carsharing modality is known as free-floating, and its only restriction is that it does not allow you to take the vehicle outside the locality where you obtained it.
If you’re interested in learning more about these new shared modalities, we invite you to read our article on “Carsharing. Shared mobility that’s here to stay”.
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