Is long-term car rental profitable?
What to choose, long-term car rental or leasing? What is more profitable? What are the rules for long-term vehicle rental? Check, you will find the answer in the article!
What is car leasing?
Leasing is the most popular form of vehicle purchase by Polish companies. This method consists in renting a car without incurring very high costs. However, a leased car also has its drawbacks. After the vehicle leasing period expires, the costs incurred in connection with its use increase significantly, so the best solution would be to sell it. However, the used car market is very dynamic and unpredictable, so it is not always possible to sell a car quickly after the end of the lease.
Long-term car rental - rules
In long-term rental, after the expiry of the rental agreement, the car is returned to the person or the financing company. It is possible to buy a car, but it is not profitable because the buyout price is very high. This is because during the rental period, the entrepreneur only pays for the wear and tear of the vehicle and does not pay back its full market value.
How does long-term car rental work?
The rental agreement specifies the estimated mileage that the car will perform during the period for which the agreement will be concluded. This allows the entrepreneur to determine in advance the costs related to the operation of the car, such as the purchase of tires, replacement of worn parts or periodic inspections. The rental price also includes the costs of insurance, assistance and a replacement car, which will ensure the continued use of the company car, and in some cases even fuel costs.
What's more, long-term car rental companies offer the possibility of spreading payments into fixed monthly installments. Thanks to this, the entrepreneur can plan his budget in advance, knowing that he will always pay the same amount for the use of the vehicle every month. Due to a smaller number of invoices, accounting is also much simpler.
In addition, the entrepreneur does not have to worry about matters related to the administration of the vehicle, as they are also on the side of the financing company. It is responsible for the full preparation of the car for release, often also arranges inspections, and even takes care of matters related to fines. All this makes long-term car rental more and more often chosen by entrepreneurs.