Car rental prepares offers dedicated to individual clients and companies. They are tailored to the needs of different target groups, which allows companies in the industry to reach the widest possible market. Car rental is possible both for hours or days, as well as based on contracts lasting a dozen or even several dozen months. We explain what exactly short-term and long-term car rental is, what are their advantages and disadvantages, and in what situations individual solutions will work best.
What is the definition of short term car rental?
Short-term car rental (car rent) is an agreement between a car rental company and the target customer to lease a vehicle for a specified period of time. The lease agreement is usually signed for a period of 1 to 30 days. Rental companies most often use daily settlements, but you can also find offers on the market with hourly settlements. Such agreements are a solution created for people who occasionally need a car and want to quickly rent it for a fee.
Short-term car rental – advantages
Short-term car rental is very popular among both individuals and companies. These types of contracts are flexible and tailored to the expectations of customers who need a car occasionally. They work well in all unforeseen situations, allowing you to quickly get the car you need, which will guarantee a comfortable journey. Many rental companies allow you to book a car online, so you can conveniently compare available models, their equipment and contract terms. The main advantages of short-term rental are:
- possibility of renting a car tailored to individual needs (passenger cars, vans, buses, 9-person mini-buses, delivery vehicles),
- cars of different classes allowing for economical driving around the city or long journeys,
- access to cars of well-known and respected brands at reasonable prices,
- the possibility of renting a premium or sports car (for special occasions – e.g. a wedding, a stag or hen party, a company banquet or another event),
- the possibility of renting a car only for the time of repair or inspection of a private or company car (including the cost of the third party liability insurance of the perpetrator of the accident),
- the possibility of renting a car during a vacation, a family trip or a trip with friends (the car can be booked online before departure and picked up on site),
- the possibility of booking and renting a car for a business trip (for conferences, training, business meetings),
- the ability to order a car to be delivered to a specified address – the so-called “door to door” service (e.g. to the airport, train station, hotel or company headquarters),
- a variety of additional equipment that can be conveniently adjusted to your needs (e.g. air conditioning, child seat, CD radio, navigation, etc.),
- low costs and no long-term liabilities (rental companies use daily and hourly settlements),
- no complicated formalities (short-term car rental usually involves reducing formalities to the bare minimum),
- transparent rental rules – many rental companies publish detailed service regulations and contract templates on their websites, which you can read in advance, which guarantees no hidden fees,
- the opportunity to test drive a specific car model (rental fleets usually include the latest models and configurations recently introduced to the market) before purchasing it or renting it long-term.
Short-term car rental – disadvantages
Short-term rental is a car rental agreement that is ad hoc in nature (usually up to 21 or 30 days). For this reason, few rental companies prepare special discounts for customers or take care of preferential conditions. Additional equipment is very often paid for separately (in the case of a long-term contract, it may be included in the subscription price). Prices may sometimes decrease when we sign a contract for a slightly longer period, but the difference between the first and the last day will not exceed 10-20%. Additional bonuses are usually prepared for customers who sign a contract with the rental company for a longer period (medium-term and long-term rental). Another weak point of short-term rental is the additional fees. Basic insurance is usually included in the rental price, but customers cannot always count on, for example, free Assistance care. Some companies apply so-called preparation fees (however, this is an increasingly rare practice) or penalties for exceeding the daily mileage limit. In the case of short-term contracts, it is usually necessary to carefully monitor the return date, because additional fees are often charged for delays or an empty tank (depending on the terms of the signed contract).
When is it best to opt for short-term rental?
Short-term car rental is a service that was created for people who need a car occasionally. The agreement can usually be signed for 1 day, so it is not binding and allows you to gain mobility without having to pay high fees. Short-term rental is perfect when:
- you do not have your own car but want to be mobile – this option is more convenient than traveling by public transport and cheaper than a taxi,
- you need a car of a different class than the one you drive every day – for example, you are planning a trip, a family vacation or a trip to see your family and you need a spacious car with a roomy trunk,
- you are planning a private or business trip in a larger group and you need a 9-person bus,
- you want to rent a premium car for a wedding or corporate event,
- you want to pick up company guests or contractors (e.g. from the airport) and you need an elegant car tailored to VIP needs (there is a possibility of renting with driver service),
- you are going on a private or business trip to another city and you want to travel comfortably by car there,
- you are arriving in Poland and want to rent a car that will be delivered straight to the airport,
- you need an additional company car for the company for a short period of time (e.g. due to the use of the previously used vehicle by employees who went on a business trip),
- you need a replacement car for the duration of your car inspection or repair,
- you sold your car and need a means of transport for a few or a dozen days before buying a new one,
- you need a spacious delivery vehicle to transport a larger load (company goods, construction materials, household appliances, furniture, etc.),
- you want to test a specific car model (e.g. before buying it, see how a sports or premium car drives).
What is long-term car rental?
Long-term car rental is a lease (rental) agreement between the lessor (car rental company) and the lessee. When wondering what long-term car rental is, it should be remembered that the characteristic feature of this solution is the duration of the agreement. The agreement is concluded for a strictly defined period (usually from 13 to 24 or 48 months), and the lessee pays a monthly installment (rent) for using the car. The amount of rent is set in advance, but it may also include additional contractual penalties (e.g. for exceeding the monthly limit). Rental companies usually do not apply an initial payment (as in the case of leasing or buying a vehicle on credit), they provide an insurance package, damage settlement, tire replacement, inspections, and a replacement car for the duration of repairs in the monthly price. Knowing the definition of long-term car rental, it is worth noting that this solution was created for companies and individuals who cannot or do not want to buy a car for cash or in installments. The service is very popular both among large companies that build entire fleets of vehicles, as well as among micro-entrepreneurs looking for a favorable form of financing a company car. Long-term rental agreements are very often considered in comparison to operational leasing. Long-term car rental allows companies to expand their fleets without having to have a high down payment or burdening the budget with a one-time vehicle price. Monthly installments are usually not high, and the company can invest any excess cash in further development of its business. In the rental agreement, the car rental company specifies the monthly rent for the rental in advance. This allows you to accurately calculate the costs of maintaining the fleet in the long term and plan the company’s budget (without worrying about unforeseen expenses).
Long-term car rental: what documents are required?
The list of documents required from Clients who intend to apply for a long-term rental of a selected vehicle is strictly determined by the policy of the specific rental company. Different expectations may be applied to private Clients and different ones to corporate Clients, who must reckon with the fact that the rental company will expect to present documentation confirming the income achieved. In the context of the documentation that the Client will have to present, the form of conducting business activity may also be significant.
What are the conditions for long-term car rental?
In practice, the terms of long-term car rental are a highly individual matter, depending on the offer of the selected vehicle rental company. It is worth noting, however, that a characteristic feature of long-term rental is very often the possibility of negotiating concluded contracts and financial terms, especially if the Client decides to rent more than one vehicle, which will mean specific profits for the rental company. It is therefore advisable to strive to negotiate a rental agreement tailored to your own needs.
Long-term car rental: pros and cons
When analyzing the issue of long-term car rental, it is worth knowing the pros and cons of this solution. The main advantages of long-term rental are:
- Access to a wide range of vehicles
A professional car rental company prepares cars tailored to the various needs of companies in its long-term rental offer. A wide range of passenger cars of different classes allows you to rent both an economical and agile car for city driving, as well as a spacious vehicle with a station wagon body, which will prove useful on longer routes. You can also successfully rent passenger buses and minibuses, vans, spacious delivery vehicles or special vehicles (e.g. refrigerated vehicles). Thanks to this, rental is an ideal solution for companies operating in many different industries and needing a means of transport tailored to specific needs. - Access to the latest car models
Rental companies prepare offers of the latest models from valued brands. For a relatively small fee, companies can then obtain both an economical utility vehicle and a representative Premium class car. These are new cars in excellent technical and visual condition, which guarantees an elegant appearance (cars are very often the calling card of companies) and reliability on the road. Most companies buying cars for cash could not change vehicles in their fleet with such frequency. - Rich additional equipment
Cars available for long-term rental usually have extensive additional equipment. Customers interested in higher comfort can choose configurations with driving assistance systems (ABS, ESP, ACC, AFIL, AFL, ASR, TPMS, TSR, EBD), parking sensors, airbags, air conditioning and other amenities. GPS navigation or modern multimedia systems can also be included in the price. - Tax benefits and no reduction in creditworthiness
Which solution is better: long-term car rental or leasing? From the perspective of a company, long-term rental is beneficial because, like a leasing installment, the monthly rent can be included in the costs of running the business. Tax profits are not the only advantage, however. Car rental does not reduce the company’s creditworthiness (like a leasing installment or buying vehicles in installments). Thanks to this, the company will not have problems when applying for a loan (e.g. investment) at the bank. - Insurance included in the package
As part of long-term rental, the car rental company most often provides a full insurance package and settlement of motor vehicle damages. A fixed monthly installment frees the customer from having to remember about the OC, AC, NNW or Assistance policy. - Servicing and fleet management
Another benefit of long-term rental is usually the servicing and maintenance included in the rental costs. The rental company then takes care of regular technical inspections (terms in accordance with applicable regulations), tire replacement and storage.
Companies are increasingly using offers that include not only the rental itself, but also the management of the company fleet. In this case, the contract may include not only service or Assistance care, but also, for example, fuel cards, GPS navigation of the fleet and a personal consultant. - Replacement car in case of breakdown
Long-term car rentals usually include a replacement car in the event of a breakdown. This way, the company does not lose a needed vehicle from its fleet during inspections and repairs, which could cause disruption in daily work. - Possibility of purchasing a car
Long-term rental agreements may include the option to buy the used car after the rental period ends. However, they are not binding, so the customer can decide for themselves whether they are interested in buying it out or, for example, they prefer to sign a new agreement and change the make or model. - Less formalities
For long-term rental, the customer receives one invoice. Thanks to this, the company does not have to settle insurance or service separately. - Flexible contracts
Long-term car rental is a service that ties the customer to the rental company for a longer period of time, which is why companies often offer flexible rental agreements. Usually, there are various packages available that can be tailored to individual needs. It is also often possible to negotiate the rental conditions or the amount of the monthly installment (e.g. in the case of renting multiple vehicles from one rental company).
Long-term car rental also has its disadvantages. This is a contract signed for a longer period of time than short-term rental, so the customer should precisely determine their own needs and expectations and only then choose a car (class, fuel consumption, capacity, equipment are important). In most contracts, early cancellation is associated with a high contractual penalty. Currently, many rental companies allow the exchange of a car for another during the contract (however, such situations are considered individually). The disadvantages of long-term car rental include:
- you are not the owner of the vehicle – cars must be returned after long-term rental, so each monthly installment is not equal to paying off the car (as is the case with an installment purchase),
- the potential purchase of a car after a long-term rental is usually quite expensive (more expensive than in the case of leasing),
- Only new cars can be financed this way, so the installments are not the lowest,
- when returning the car, it undergoes a detailed inspection by an expert – any excessive wear, scratches or damage must be paid extra (in practice, you have to take much more care of a rented car than your own car),
- many contracts have a mileage limit – you have to pay extra for each extra kilometer, so it is worth considering the contracted maximum mileage carefully (sometimes you can negotiate an increase, and the one-time fee for an annex to the contract is often lower than the penalty for each exceeded kilometer),
- rented cars are serviced only at authorized service stations, where service prices are quite high. If the service center determines that scratches or other damages were caused by the driver and are excessive wear, an additional invoice for painting or other services may be issued to the lessee,
- no discounts on third-party liability and comprehensive insurance – the car is registered to a rental company, so the lessee does not collect any discounts on insurance for the period of driving it (this is important mainly in the case of sole proprietorships, where the rented car is the basic means of transport). However, this rule also works the other way round – any collisions do not count towards the years of accident-free driving,
- in the event of car theft, the installments are calculated until the rental company receives compensation from the insurance (then they will be deducted), so it may turn out that the company pays for the rental, but does not have the car for a certain period. There may also be a situation when the current value of the car at the time of theft (or total loss) is lower than the sum of the installments that remain to be paid. Then the lessee is charged the difference (in such a case, you can buy risk insurance – GAP).
Long-term rental is a long-term commitment, and its profitability depends primarily on adapting the detailed terms of the contract to your needs.
Is long-term car rental worth it?
Long-term car rental is an ideal solution for companies of all sizes (from micro-enterprises through the SME sector to large corporations) that want to expand their fleet without having to make large investments at once. The service will meet the expectations of both companies that need many cars (e.g. for a transport fleet or a network of field representatives), as well as companies that want to finance one or several cars in this way. The solution will work best when:
- you want to quickly expand your company fleet without unnecessary formalities,
- you want to avoid having to manage your company fleet yourself (service, replacement car and insurance premiums will be paid by the car rental company responsible for performing them, and you will receive one invoice for all services),
- you need a representative premium car and you do not have the budget to buy it for cash,
- you are looking for an alternative to leasing that will not burden your company’s creditworthiness,
- you want the company to have only new and reliable vehicles.
Long-term rental can also be used by private individuals who need a car but do not have the appropriate budget to purchase it.
