Is there a difference between car leasing and renting a car? Absolutely!
There are differences in obtaining a car through car leasing, versus renting a car, versus financing a car. Fundamentally the differences may sound similar, but it’s important to know and understand these differences.Rent a Car
Renting a car is pretty much what is says. You pay x dollars at a set frequency (ex. hourly, daily, weekly, monthly). Renting a car is typically for a very short period of time, unlike car leasing which is 24, 36, 48 months (unless you take over a short term car lease on a lease transfer). When an individual rents a car, they typically incur a higher cost / fee for the time spent driving the vehicle.
Car rental typically includes unlimited mileage and CDW. Each car day included in a tour consists of a 24-hour period beginning when the car is picked up. No refund will be made for cars used for less than a 24-hour period. If a hire-rental is returned outside the 24-hour period, additional charges may apply. Car rental does not include taxes, local assessments, liability insurance, drop off charges, gas, collision damage waiver, personal accident insurance or personal effects protection, unless stipulated in the car rental agreement.
Leasing a Car
Car leasing on the other hand is taking temporary ownership in a vehicle over a period of time, est. 24 to 48 months, where the individual leasing the car and the leasing company agree on a set schedule of monthly payments until the end of the vehicle lease. Leasing a car has a much longer commitment time than renting a car, and typically is less cost per month.
Car leasing has set mileage per year (outlined in the lease agreement) and is the responsibility of the lessor to maintain the vehicle, including repairs (generally covered under a warranty), gas, etc.
Leasing a car can also require the leasor to place a down payment on the vehicle before driving off the dealers lot, and the leasor has the option to buy / purchase the car at the end of the lease term.
And with car leasing, the individual has the option to transfer the car lease through a car lease assumption process to another individual seeking to take over a short term car lease. With renting a car, the individual renting the car cannot.
Next: Is leasing right for you?