What’s the difference between renting and leasing a car?

It might seem like splitting hairs, but ‘leasing’ and ‘renting’ are terms that you’ll come across when searching for car hire. In fact, there are quite significant differences in renting and leasing a car which you need to be aware of before pursuing any options. It could also be that renting or leasing is a more attractive option for you than buying a car at all. Fortunately, we’ve put together this guide to give you all the key information on the differences between renting and leasing for cars.

What’s in a car leasing agreement?

A car lease, known as a Personal Contract Hire (PCH), is an agreement where someone gains the use of a vehicle for a set period of time. This is usually over a longer period, typically 2-5 years. During a lease, you are required to make monthly payments to keep using the car. These monthly payments form the basis for how you will see leases advertised, as an initial payment is required which is worth multiple months.

The lease agreement will usually include a warranty which will cover some degree of the maintenance or repair work. However, every lender’s warranty will be different and so there will likely be repairs in certain areas which won’t be covered. When the lease term comes to an end, you will have the option of extending the lease agreement further or buying the car outright.

What is a car rental agreement?

Whereas you pay per month for a leased car, rental cars are often charged by the day or week. Daily car hire (24 hours) is typically the shortest rental period available. The rental agreement states that you are free to return the car at any point within the maximum term. During this time, the rental company is responsible for the repairs, maintenance, and insurance of the vehicle as they still own it. However, charges may be applied if you are responsible for any damage done to the car during the rental period.

In both rental and lease agreements for cars, you will likely find the following information:

• Information about the car being hired – make, model, number plate, colour, seats etc.
• Duration of the hire period along with start and end dates.
• Details of any insurance and warranty cover.
• Payment details.
• Terms and conditions of the dealership.

Renting vs leasing a car: which is better?

Ultimately, your reasons for wanting a temporary mode of transport will dictate if renting or leasing is the best option for you. However, it still pays to be aware of the main benefits of each so you know where to look when you’re in need of a car.

Pros and cons of vehicle leasing

Pros:

• Monthly payments that are relatively affordable compared to the annual upkeep costs of owning a car.
• Meets long term needs without committing to a car as an investment.

Cons:

• There is an early termination fee if you decide to end the lease before the agreed date.
• Not suited to emergencies that cause you to need a car on a short-term basis.
• Possibility of strict terms that can incur penalties.
• Lease price can be affected by depreciation, meaning that premium brand cars are likely to cost more to lease.

Pros and cons of vehicle renting

Pros:

• Variety of vehicle types and capabilities on offer means renting a car can serve many different purposes. For instance, Croxdale rental has a range of cars for compact city hopping, long distance driving, off-road trips, and much more.
• Flexible – gives you quick access to personal transport which you are free to use for your own ends. Renting a car can even be done before or after travelling abroad.
• Cost effective – the contract for renting a car is also flexible, able to take place over a number of days that is best suited to the needs of the renter.
• Coverage for maintenance and repairs.
• Can meet short term needs such as holidays or moving residence.

Cons:

• The car must be returned in the same condition that it was given at the start of the rental. Penalties can be issued if this isn’t the case.
• Can be more expensive if done over a long period of time.

Durham car rental services

If you’re local to the areas around Durham and Newcastle, we can help you find the rental that’s right for you. Even if you’re completely new to the idea of renting or leasing a vehicle, a member of our friendly team will be your guide. Simply call us or get in touch through our website and we’ll be happy to discuss car rental options.