Is it cheaper to lease a car or use short-term rentals?
The differences between renting and leasing a vehicle are pretty huge, as one involves ownership and the other does not. Renting involves a charge for each increment of time (by the hour or day).
With short-term rentals, you pick up and drop off the vehicle after you’ve completed your driving tasks, and with a lease, you’re paying a company to purchase the vehicle you’ll be using, paying them back with interest over a set term.
To decide which route is best for you, you’ll need to analyze your driving needs and lifestyle habits.
When short-term rentals make sense
Short-term rentals will make more sense if you live in an urban city with a range of transit options at your disposal. If you don’t need a vehicle for an extended period of time, and you have other ways of getting around (bike, public transit, carpool), then consider having a short-term rental membership for the occasions when you need to drive.
If you can’t think of the next time you’ll need a vehicle, it’s probably better to stay car-free and use short-term vehicles that charge based on time.
It can cost around $30 for a car-sharing membership then $10 to $20 per hour to take the vehicle for a ride. Four six-hour trips per month could cost you around $320 per month, not including gas.
When short-term rentals don’t make sense
Short-term rentals won’t make sense if you’re living in a small town, where driving is almost a requirement to run even the simplest of errands. How would you get to the pickup location, or return home once you’ve dropped your vehicle off?
If you have a specific use for a vehicle, say, to get to and from your workplace every day, whether it’s in your town or you need to commute, leasing a vehicle is going to make the most sense and convenience.
If you can foresee the need for a car over the next couple of years, you can lease a car until you save up for one.
What can you afford?
Leasing a vehicle is a type of financing where a company loans you a vehicle, provided you make your monthly payments towards the value of the car. It helps drivers who want a vehicle but don’t necessarily want to pay the purchase price upfront or outright.
Leasing is different than a car loan, in that, car loans help with the purchase of a vehicle that you own automatically, while leasing still means the ownership rests with the car company.
If you don’t think you can keep up with the car payments involved in a lease contract, it’s best to stick to the pay-per-use model to get you from point A to B, only when you need it.
Even if you live in a place that has a low walk-score, you can simply take a taxi or rideshare to the pickup location of the short-term vehicle, and do the same on the way back if transit is not available.
Leasing companies will want to go over your credit score and risk profile if you’re planning to borrow a vehicle, to see how likely you are to meet your due dates.
With a short-term rental, your credit score will not be scrutinized in most cases, and you’ll be expected to have some sort of insurance coverage.
Cheap will depend on your needs
At the end of the day, anyone needing a vehicle on a permanent or near-permanent basis should opt for a leased vehicle, if you can afford it.
For sporadic, random driving needs, look into your community’s short-term rental offerings. By choosing to rent for specific events, you’ll save lots of money per month in fuel and parking.