There are so many different vehicle renting contracts out there, that it can seem daunting to know which one is right for you. In this blog, we are going to look at two contract types, namely rent to buy contracts and long-term rental contracts. Let’s start by explaining what each concept is, and take you through the pros and cons of each contract option; enabling you to know which choice is right for you.
What is rent to buy?
As simple as the name suggests, rent to buy vehicle contracts enable you to rent a car for a specific period of time with the intention to eventually buy and own the vehicle at the end of the rental period. Rent to buy contracts are entered into by a rent to buy company and a private individual and may pertain to one or a fleet of cars.
What is long term car rental?
Long term rental contracts can take place between one month and several years depending on the need of the client. Long term rentals are not entered into with the intention though to ever own or buy the car itself. These kinds of contracts are usually entered into between car rental companies and private clients or larger companies too.
What are the pros and cons for each type of contract?
Many clients often ask what the difference between the two types of contracts are, or specifically what the pros and cons are. Future Motor Lease, we, of course, promote rent to buy vehicle contracts but there are benefits to both kinds of vehicle leasing contracts. Take a look at our short list of the top pros and cons for each:
Pros of Long-term rentals:
- Long term rentals are flexible and can take place between one month or a few years, there is no fixed duration of how long a long-term rental has to be.
- You do not need to pass a credit check in order to enter into a long-term rental contract
Cons of long-term rentals:
- You do not have the option to buy or own the car you have been renting at the end of the long-term rental period.
- You will be required to put down a deposit depending on the length of the long-term rental at the beginning of the contract.
Pros of rent to buy:
- The money you pay each month is like a car repayment, in that you will have the option to buy and eventually own the vehicle you have been paying for all this time.
- You will not need a credit check to get a rent to buy contract.
- The contract is for a fixed period of time with a fixed deposit, so you will know the exact terms of the contract up front.
Cons of rent to buy:
- You will be required to put down a small deposit to enter into the rent to buy contract.
- You will need to pay a monthly rent to buy fee but this will include extras like insurance etc.
Depending on the availability of your funds and what you require the vehicle for, the choice to either rent to own or opt for a long-term rental really is an individual decision.
For more information on rent to own contracts, chat to the experts at Future Motor Lease now or call us on 011 026 0003.