The “renting” of vehicles, advantages and disadvantages

Home » The “renting” of vehicles, advantages and disadvantages

The “renting” of vehicles, advantages and disadvantages

Are you thinking of buying a car, but do not want to make a large outlay? Renting is a great alternative, whether you are an individual or if you work on your own or for a company. We tell you the advantages and disadvantages.

Leasing allows you to purchase a vehicle at a price as tight as possible, have a certain monthly expense and be able to renew the vehicle every so often, to adapt to your needs or tastes at all times. Are they all advantages? Know more about Ferrari ne shitje.

Let’s define the process of “renting”

Technically, renting is not a purchase of the vehicle, but rather a long-term rental , being able to finish the operation with a purchase or not.

Therefore, the person or company that uses this system is not the owner of the vehicle , but it is managed by paying a monthly fee to the renting company , this includes all the expenses of the car , its repairs and insurance.

Consequently, the person or company that is the beneficiary of the operation will only have to pay for gasoline (or energy) and the monthly rental fee , with the average duration of this type of contract normally being 3-4 years, although perform from one year to 10 years

Once the contract is over , the private or legal person who is the beneficiary of the vehicle can always execute a purchase option for it or restart another new contract, renewing the car and updating the operation again.

Renting for freelancers and companies has a series of tax advantages that individuals cannot due to the very nature of the operation, but this does not mean that anyone can carry out this type of contract.

The leasing service offered by manufacturers and financial institutions provides packages of very diverse conditions and services, which we can practically classify into two generic situations:

  • Fixed Renting , in which the desired car is released and the different levels of services to choose from are added, in exchange for a medium- to long-term contracting commitment.
  • Flexible Renting , which is a good option to have a vehicle quickly without commitment of time of use. You can choose the necessary vehicle and return it to decision without penalty.

Advantages

Leasing contracts provide numerous advantages to their users as they include multiple services that give comfort and peace of mind to the beneficiaries:

  • As the renting does not appear in the company’s balance sheet, the fee is fully deductible , as long as the use of the car is related to the activity carried out by the company.
  • At the end of the contract you can change your car , being able to release a new vehicle in short terms.
  • Wide variety of cars  to choose from and multiple prices. You can choose the car that best suits your circumstances and tastes at any time.
  • The insurance is included in the fee , in general, the insurance is fully comprehensive with excess.
  • Professionals and freelancers can also deduct the renting fee in the Personal Income Tax Direct Estimate Regime, provided that the vehicle is related to the activity they perform.
  • There is no expense derived from car maintenance, no revisions, no breakdowns, no tire change…
  • You do not have to pay  any tax , or ITV . It also includes the roadside assistance service , as well as legal help to appeal traffic fines.
  • A  fixed amount is paid , without any extra or surprise, and without entry fee or interest.
  • If you do not want to change cars when the contract ends, you can extend the time of this or buy the car, for the fixed amount.

Disadvantages

It is also true that rental contracts have some drawbacks that should be known before entering into this type of contract:

  • The beneficiary of the contract does not own the car at any time until defining, where appropriate, if the purchase is made at the end of the rental.
  • The car must be treated in the workshop indicated by the contract renting company, you cannot go to just anyone.
  • There is a  certain number of kilometers that can be done per year , stipulated in the contract. The difference is paid if it is not reached and a penalty is paid if it is exceeded.
  • Leasing companies only offer new products , so at the moment it cannot be applied to second-hand vehicles.
  • You can not cancel the rental contract, unless it is paying a penalty, quite high.
  • No modifications can be made to the car, which must be delivered at the end of the contract as it was at the beginning. Any modification must be consulted and approved.

In short, before a vehicle purchase or use operation, each individual, self-employed person or company can correctly perform their numbers for the most convenient choice, understanding for our part that leasing operations in general are very suitable , without a doubt, for self -employed workers. and companies , although they also have obvious advantages for use by individuals .

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