When it comes time to buy a new car, you have several options, including leasing. Rent a car basically means you borrow it for a certain period of time, and when your lease expires, you return the vehicle to the dealer. Leases usually last around three years, but some dealers offer much shorter contracts.
If you want to drive a new car without making a long-term commitment, a short-term lease may be an attractive solution. However, short-term car rentals can be a gamble.
They’re usually not the most financially practical option, but they can work for some people. Before you commit to a short term lease, make sure you know the pros and cons.
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Advantages of Short Term Car Rental
Benefits of short-term car rentals can include:
Short-term car rentals can be a way to access the newest cars on the market without making a serious investment. If you like owning a new car, you might appreciate the ability to rent the latest model for a year or two.
Car trends can change quickly, so when your lease is up, you can trade it in for another popular model with the latest features.
If you need a fast car but can’t find the perfect one for your lifestyle, a short term car rental might be the perfect solution. It gets you behind the wheel fast, and commitment is low.
In the meantime, you can continue to research and test drive cars to find one worthy of your investment.
Maybe you’re on a year-long work assignment in another state. Maybe you’re planning to move to a metropolis with lots of public transit options next year, and you don’t need a car.
Whatever your situation, if you need access to a reliable vehicle and don’t want to pay for taxis and rideshares every day, a short-term rental may make sense.
Short Term Car Rental Cons
There are also disadvantages to short-term rentals, including:
Based on Experience, new cars depreciate 20 percent in the first year. With a short term lease, you drive the car while it depreciates quickly. And you pay for it.
Monthly payments on short-term leases are usually much higher than payments on long-term leases because they account for the significant loss in value that occurs during the first year or two of the car.
The rental agreement usually specifies how many miles you can drive without incurring a penalty. Most dealers offer renters between 10,000 and 15,000 miles per year unless you have high mileage rent. If you plan to use the car on road trips or long daily trips, you may risk exceeding your mileage limit.
Long term leases are much more common than short term leases. You may have trouble finding a dealer in your area that offers leases for less than two years. Having fewer options can land you a worse deal, because you have fewer offers to compare with.
Who Should Consider Short Term Rentals?
Short-term rentals can be a good idea if:
- You only need the car for a short time. For example, you may need a temporary vehicle because of work, school, or personal obligations, and you’d rather not do anything in the long term.
- You love new cars. If you’re happiest behind the wheel of a new car, it might make sense to opt for a short rental.
- You want flexibility. If you think your tastes or needs might change in the next few years, you can opt for a short-term lease and swap cars when your contract expires.
Short Term Rental Alternatives
Short-term rentals aren’t your only option if you need temporary access to a reliable vehicle. Other options include:
Taking Over Other People’s Leases
Instead of getting your own lease, you can inherit someone else’s lease which they no longer want. People who want to end their contracts early often post their leases on websites to advertise them to people looking for short-term rental options. Takeover leases can provide more flexibility than dealers, as you may find tenants with 24, 18, or even 12 months remaining on the lease.
Carefully study the monthly payment, rental period, and condition of the vehicle, and understand any fees. Make sure you don’t take over new issues by taking ownership of the lease. You’ll be the one to turn the car over to the dealership at the end of the contract, and if the original renter racks up mileage or wear and tear, you can be liable.
Rental transfers sometimes require an application and a credit check. Swapalease, a popular rental takeover platform, notes that state taxes are usually part of your car’s monthly payment, but can vary by location. Contact your local department of motor vehicles (DMV) to learn how taxes work lease takeover in your state.
Long Term Car Rental
If you only need a car for a few months, you can rent it once a month from a rental service. Some car rental companies, such as Avis, allow you to rent a car for up to eleven months. Long term leases have facilities such as:
- Flexibility: You can renew your lease every month. If you’re not sure how long you need the car, this is a convenient option.
- Low rates: Many rental companies offer low rates to people who agree to long contracts.
- Different models: Many rental car companies will allow you to switch your model for another one between the months, so you can test many different vehicles.
- Comfort: Maintenance, paperwork, and insurance are usually the responsibility of the rental company, not yours.
Traditional Long Term Lease
Another option is to get a standard lease. If you want to leave early, you can find someone to take over. This option requires a bit of luck, as you’ll need to find someone who is happy with your rental terms and needs a short-term car rental yourself.
How to Get a Short Term Car Rental
Follow these steps to find a short-term rental that’s right for you:
- Visit the dealer. Talk to various dealers in your area to learn which ones offer short-term rentals and which have the most favorable terms.
- Check your credit. You usually need strong credit to qualify for a lease because the dealer wants to know that you can make your monthly payments on time for the duration of the lease.
- apply. Once you’ve found a vehicle you like with a rental duration that suits you, you’ll need to apply.
- Put down a security deposit. Most rental agreements require you to pay a security deposit that the dealer returns to you if the car is returned undamaged at the end of your lease.
- Pay fees. You’ll often have to pay some fees upfront in leasing a car, such as an acquisition fee and a registration fee to register it in your state.
Finance & Insurance Editor
Elizabeth Rivelli is a freelance writer with over three years experience in finance and personal insurance. He has extensive knowledge of various lines of insurance, including auto insurance and property insurance. His byline has appeared in dozens of online financial publications, such as The Balance, Investopedia, Reviews.com, Forbes and Bankrate.