Car Leasing VS Rental
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| Consumers may be confused as to the difference between renting vehicles and leasing them. We have list out the differences between car leasing and car rental. |
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Differences in Vehicle Management
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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 finances a single vehicle for the duration of the contract with a single customer (or company).
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 colour 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. |
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Differences in Financial Management
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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.
Rental is not a form of vehicle financing (or operating lease) whereas leasing is. Lease financial payments are easy to calculate using a well-defined formula (employed throughout the leasing industry). The calculation of the other services offered by the leasing company will provide them with the competitive edge. |