This guide explains what long term car rental is, how it differs from standard car rental and the set of circumstances which mean you should consider this as an option.
Long-term car rental is a way of accessing a vehicle without having to commit to a long-term contract or high cash outlay. You can hire a car on a monthly basis, committing to up to six months at a time, with the flexibility to extend if you need to. Or you can just return the vehicle at the end of the final month of the agreed period with no penalties.
Based on a cost per day model, long-term car rental is much cheaper than daily rental. This is because you are committing to a minimum of one month, whereas with daily rental there is no minimum rental period to commit to and you can return the vehicle at any point. So, the effective daily rate is cheaper for long-term rental.
However, it’s more expensive per day than leasing. This is because with a leasing contract you are committing to between 12 and 48 months.
There’s a simple rule when it comes to acquiring vehicles on a rental or lease basis. The longer you commit, the less the effective daily rate of the car. But the lower the effective daily rate the less flexibility there is for you to return it.
Long-term car rental is a very good option for businesses that run a fleet of cars for staff. When a new employee starts with a company and is entitled to a company car, it can be quite a risk to commit to a lease contract from day one. What if the new employee doesn’t make the grade? If the company provides a car for six months on a long-term rental basis, it gives time for the new employee to complete their probation period and for both parties to decide if the employment will continue. We call cars taken for this reason probation cars.
Many companies generate their revenue through contractual work and sometimes this work warrants additional cars. Again, long-term rental allows businesses to acquire cars that are fit for purpose and for a length of time that most closely matches the length of a contract. And if the contract extends, it is easy to extend the length of the rental.
When you want to change your vehicle for something completely different, how confident can you be that you can live with the choice you make? Long-term rental allows you to try a new car for a month or more and decide whether it satisfies all of your requirements. Whether those requirements are more space for the family, better economy or more helpful technology long-term rental is a great way to transition to a longer-term lease contract.
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