You do not want to invest in buying a new car, or you want to change more often? Long Term Rental may be the solution for you.
How does it work? What are the advantages and disadvantages? All the answers to your questions…
What is an LLD (Long Term Rental)?
Purchasing a car is a waste of money over time, not an investment. To save some money, you can rent your vehicle. Next to the Rental with Purchase Option is the Long Term Rental which allows you to rent a car for one to five years for a specific mileage, but not to become the owner.
Your bank, or a financial institution, buys the vehicle and leases it to you for a fixed period of time for a monthly rent determined according to the price of the car, the amount of its residual value at the end of the lease, the duration of the contract , annual mileage, and various services (insurance, maintenance, assistance …) that can be offered.
Staying on the mileage will save you a lot of extra costs.
It is a rental pure and straightforward, without deposit, with a refund to the seller at the end of it. If you want to change vehicles regularly, this type of rental allows you to drive another new car at the end of the lease.
However, be careful to respect the mileage imposed on the contract which is generally 15000 km/year for a gasoline vehicle and 25000 km/year for a diesel, but which can be negotiated.
What are the advantages/disadvantages of an LLD?
The Long Term Rental allows you to drive a new car against the payment of monthly rent. This has advantages and disadvantages.
The advantages of Long Term Rental are more or less numerous, depending on whether it is done by a private individual or a company. As for the disadvantages, they are the same for everyone.
Benefits to individuals:
- Mastery of the budget (identical rent every month)
- Maintenance, insurance, and assistance included in the contract
- No starting capital
- Frequent change of vehicle without the worry of resale
- Cost price mileage more economical than the purchase of 15 %
Benefits to companies:
- Cash mastered and planned
- No staff dedicated to maintenance
- Does not appear in the balance sheet
- Decrease the apparent indebtedness of the property
- No advance of VAT
- Total financing
- No depreciation
- Rents are expensed
- Vehicle always in perfect condition
- no mileage allowance to handle
- No owner
- Mileage to be respected
- Excess mileage charge
- Gray card in the name of the renter
- Any trace of wear (scratches, missing parts, etc …) will be charged in addition to the end
- No purchase possible at the end of the contract