As a regular consumer, you might have confusions about renting and leasing a van or commercial vehicle. Both terms can mean different things, depending on the context and a few other factors. Let’s talk about hiring vs. leasing vehicles in details.
Understanding the basics
Commercial vehicles may be needed for varied reasons, both by individuals and businesses. From moving goods from one part of the city to another to offering reliable delivery services, having a van at disposal can be quite handy.
Hiring/Renting: Usually, if the needs are for a limited period, people prefer to pay a small sum for using the vehicle. That’s the basic concept of renting. You contact one of the professional vehicle rental companies to explore the various options in hiring a van and select one that meets your needs. Ideally, you will pay just a one-time fee on the entire deal, and the costs are usually affordable.
However, some businesses and even individuals do need vehicles for a longer period, often extending over one month. If your needs are limited to a few months, you can still choose to get a van/vehicle on hire, but on a long-term rental agreement. Such arrangements can help in saving the costs on a daily rate.
Leasing: If you have a growing business, you probably need a vehicle for longer terms, often extending beyond a year. Most new businesses don’t have the money to get a new van, which is why they contact rental services for leasing. Leasing basically allows you to own a new or old vehicle, with an agreement that ranges anywhere between one to four years. As a customer/business manager, you can also choose to include a service and maintenance cover, if required.
7 Important details not to be missed
The only similarity between leasing and renting vehicles is the fact that you pay for someone else’s vehicle. Apart from this aspect, everything else is entirely different, as mentioned below.
- Time: Leasing is more about a long-term commitment, while renting is usually for a few days or months. Leasing is more like buying a car. You will pay for the lease as per the agreement, unless you want to purchase the vehicle or rent another one. Renting is more about personal use, depending on generic requirements.
- Services: Do note that only a few companies deal in car leasing, while you will find several options for hiring. Usually, companies that deal in leasing don’t really offer cars and vans for hire, but most rental services can arrange for leased vehicles, if required. Again, this aspect can differ with every service and location.
- Ownership: Leasing terms can vary, but in most cases, the customer has the choice of owning the vehicle at the end of the lease. It is much like buying a car, but with smaller differences. Some leases can have ‘lease-to-own’ agreements, while for others, the rental company and customer can decide specific terms. If you are renting the vehicle, you probably pay a fixed one-time/monthly price, with no potential ownership option.
- Insurance: If you are leasing a car, you must pay for insurance, regardless of the other terms. With rental vehicles, insurance is usually recommended to customers, but it is never a compulsion. For leasing, you must carry full coverage, which will include all sorts of things, such as collisions. This is mainly important to protect the value of the car. Nevertheless, rental insurance cover is always cheaper than that of leasing.
- Use: Typically, businesses require leased vehicles, mainly in the logistics and manufacturing sector. Instead of buying a new vehicle with an upfront cost, leasing is much more economical for such companies in the long run, given that renting commercial vehicles is usually expensive. Renting is mostly reserved for small requirements.
- Maintenance: All rental vehicles are managed and serviced by the concerned company. Barring accidents and collisions, customers don’t need to pay for the upkeep or routine repairs. Leasing is different in this respect. While the leasing company still owns the vehicle, the maintenance is usually managed by the ultimate consumer. You can select the color and model of the leased vehicle, and the leasing service will buy it from a dealer/supplier for your needs.
- Other Differences: The prices of rental vehicles are decided by the parent company, based on certain market rates and proprietary terms. For the price paid, one can get many additions, such as unlimited mileage. Usually, rental services offer an upfront cost to the customer, which may or may not include a discount. While leasing is a form of vehicle financing, renting is not. Lease costs are determined with the help of set formulas, and the costing is much more transparent. Usually, the terms and conditions of leases are same across the entire industry, barring a few exceptions. Apart from the industry norms, customers may be charged more for a leased vehicle, based on additional services and add-ons offered by the leasing service.
By now, you probably know that leasing and renting vehicles are two different concepts, if you don’t you should consider taking a look at CVS Leases. However, the same firm or rental service can offer both options. If you are new to renting, it is best to understand the difference between short and long term rentals, so that you can save on the costs, in the long run, depending on your needs. On the other hand, leasing is simple, but involves more costs. For most businesses, leasing is a big financial decision, which must be evaluated for all aspects. People opt for leasing because it saves the cost of owning a car, while still having full access and control. However, it is important to read the terms and conditions in detail, as leases are meant to be flexible with regards to ownership at the end of the lease.
Check online to find a range of vehicle options and before you take a decision, compare the quotes, terms, and conditions in a transparent way. It is always better to work with a reliable rental/lease service, even if that means paying a tad more than other unknown companies.