3 major differences between leasing and renting a car
There’s a marked difference between leasing a car and renting it. Which is why it is imperative that you become familiar with these terms and do not mistake one for the other. The only similarity that exists between “car leasing” and “car renting” is that you will be paying for the right to use a car that is owned by someone else. However, this is where all the similarities end.
The major differences in leasing a car and renting it lies in the distinct financial arrangements, the different types of commitments, and the expectations pertaining to the usage of the vehicle by the driver.
The prominent differences between car leasing and car renting are outlined below:
The time frame
One of the major differences between car leasing and car renting is the time frame; leasing the car is a long-term commitment and you can use the car as your regular vehicle for personal purposes. Leasing a car is similar to buying a car on loan; you will have to pay the lease until you decide to buy a new car or lease a new car. Whereas, rented cars imply short-term commitment. You can rent the car for a week or two when you are on a vacation. In fact, you can rent a car even for a single day.
Potential for ownership
The potential for ownership is another factor that helps one differentiate between the two; when you lease a car, it usually involves the possibility of ownership towards the end of the lease period. Mostly, this occurs when you opt for the lease-to-own deal, where you can choose to stop paying the lease or pay enough to own the car after a period of time. Car renting has no scope of ownership towards the end. You will use the car for the specified number of days and return it to the company when your contract comes to an end.
Car leasing and car renting providers are completely different; car leasing services are offered by car dealerships, whereas the car rental agencies offer rented cars. The car dealerships that offer car leasing services even sell cars, and the lease arrangement is considered to be an alternative to the traditional financed purchase, whereas, car rental agencies only allow the customers to rent the cars and there’s no possibility of owning these vehicles.