How to Choose a Long-Term Car Lease for Your Business
No matter what city or country you are in, buying a car has not remained the feasible option anymore. With people having limited finances and opening their own business, they can’t risk tying up so much capital in just a single car. So, the most practical option becomes renting out that car. But its not just important for businesses only, people who are travelling in a different country might find it more cost-effective than hiring a taxi or using the public transport. This article is a guide of things that should be considered before hiring a car for your long-term use.
What Does Long-term Mean?
The term long-term contract varies from place to place in terms of the length of the contract but usually a 6-month lease is a minimum for hiring a long-term car. This lease can extend till four years depending on the car rental company and terms of the contract. For medium term contract, 2 months is the minimum you can get. This lease period is agreed at the start of the contract and it might also affect the price you are getting from the company. For long term car lease Dubai companies usually offer cheaper rates and vice versa.
Lease vs Rent
From a basic point of view, there is not much difference between leasing and renting. The only difference is the terms on which these agreements are signed. For car rental companies a lease is the same thing as a rental. Things however change in case of car dealerships due to number of leases available. However, the main differences are between a hire purchase and a contract hire, which is discussed in subsequent paragraphs.
Hire Purchase vs Contract Hire
A hire purchase is basically a type of contract, where the dealership will offer you to buy the car at the end of the contract. This intent needs to be established before signing the contract. In this case the payment you make for availing the services of car is an installment until you have paid the whole amount. A contract hire on the other hand is when you don’t have to buy the car at the end of the hire period. This form of contract is like long-term lease. However, in this case the depreciation costs need to be covered by you.
Advantages of Leasing
The primary advantages of leasing are kind of like those of renting. The first one is that you don’t have to invest a lot of money in an asset, car. The company also offers insurance and other maintenance checks which can save you cost and time. The car you take on lease is also insured which is also a great advantage. Some companies also offer 24/7 on road assistance. Also, no advance payment is required when signing the lease contract.
Personal Lease vs Business Lease
This decision concerns those who are confused between hire purchase or leasing a car from a dealership. The primary difference between the two is that, with business lease you are using the company’s name to lease out a car, meaning you can claim expenses which makes this option cheaper. Personal lease being a short time contract tend to prove expensive to most people so is not feasible.