Long-term rental alternative to buying or leasing a car?

Service Business

Entrepreneurs can choose from many ways to get a car for the company. Among them, leasing is still the most popular. However, its position may change as a serious competitor has appeared on the horizon - long-term rental. Until recently, this solution could be used mainly by larger companies with a car fleet of more than 20 cars. Currently, on the Polish market, it is possible to rent a car long-term also by smaller companies.

Long-term rental - similar to leasing, but ...

CFM (Car Fleet Management), ie long-term car rental, is in its assumptions very similar to leasing. The company does not acquire the vehicle, but pays the rental company for the possibility of using the car from among those in its offer. The monthly fee agreed in the contract for such a service covers both the rental of the vehicle and its comprehensive service by a specialized external company. Therefore, the owner of the company does not have to worry about the issues related to the ongoing maintenance of the car, its servicing or insurance.

The main difference between long-term rental and leasing is the inability to buy the car after the end of the contract. In this case, the car is simply returned to the owner.

The benefits of such a solution are large - first, as in the case of leasing, the entrepreneur has the right to include installments in tax deductible costs. Secondly, in terms of logistics, it does not have to worry about the above. issues related to the use of the car. What's more, the owner of the company will not be surprised with the costs of maintaining the car - thanks to the fact that they are paid in the form of monthly installments regulated by the contract, they become more predictable. With this solution, the entrepreneur's creditworthiness does not change either.

The indescribable advantage of long-term rental is the fact that in the event of a car breakdown, the entrepreneur receives a replacement vehicle. This allows for the smooth operation of the company, because the owner does not have to give up activities for which he needs a car.

Contrary to leasing, in the case of long-term rental, the entrepreneur may or may not make an initial payment. This means that in order to take advantage of the offer, he does not have to have any own contribution.

Long-term rental also available for small businesses

CFM services have always been directed to large enterprises, e.g. transport companies, or employing many sales representatives. In the West, however, it is not surprising that small companies also benefit from long-term rental. In Poland, it has only been possible recently.

When deciding to take advantage of such an offer, the entrepreneur should remember that his company can be checked for the ability to pay bills on time. A special verification process is used for this. This means that this solution, like a loan or leasing, will not be available to all small businesses.

Long-term car rental is certainly a convenient solution. Due to the additional services provided under the contract and the relatively low amount of the monthly installment, it can become a strong competition for traditional forms of financing in small companies.

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