Car leasing and rental are two common terms in the travel service industry. There are world famous car rental brands that offer rental service as well as leased cars to customers in many countries. Now, common customers get confused of the terms rental and leasing as both of them look similar at the first look. In fact there are lot of differences between leasing a car and renting a car. Both these options can be beneficial based on your requirement.
In short, renting is always referred to short period contract and leasing is often related to long term access of a vehicle; though several firms offer short term leasing too. Renting of car is to fulfill the needs of people, such as business people, tourists or those who want a particular type of vehicle, such as a luxury car or a car in economy segment, for a short amount of time, while leased vehicles are given to customers as a substitute to buying a car. The users of leased cars enjoy the feeling of ‘own’ vehicle. Leasing operators have a long-term contract and relationship with their customers.
When renting a customer orders a car from the available fleet of vehicles and in terms of leasing, the customer specifies and orders the vehicle they actually want. Rental vehicles are owned by the rental company and are maintained, serviced and insured by them. Rental companies make money from renting the same vehicle over and over again. Leasing includes a single vehicle for the duration of the contract with a single customer.
Leasing companies also own the vehicle. The customer initiates the vehicle request by specifying and ordering the actual vehicle they require and are able to select their color choice and other preferential options. The vehicle is ordered and the leasing company buys it from a vehicle supplier/dealer and then leases it to the customer alongside the value-added services.
The charges are calculated in different ways in renting contract and leasing contract. The way the two companies charge for their services, the way charges are calculated, invoiced and billed between rental and lease operations cannot be compared as both these procedures follow absolutely different accounting practices.
Rental rates are determined by the rental company and based on a daily or weekly fee. They may include unlimited mileage or a set mileage rate and the method by which rates are determined is company confidential. They can vary widely, even within the same rental company, as they are based on a variety of discount schemes.
Renting car is ideal for short term travelers and visitors to a distant location from home. But, leasing usually is meant for people at the same locality. Many leasing firms offer leased cars to professionals, corporate, foreign workers etc…
Each of these service is associated with multiple features like anytime upgrade or downgrade, risk-free insurance coverage, round the clock assistance etc…
