Should I get a short term lease?
When we talk about leasing or finance we often talk about it in the long term. Contract Hire contracts are often between 2-3 years and finance options such as Hire Purchase can be up to 5 years so short term isn’t something we really talk about.
However, it is an option. And it’s a great option for those in a certain situation.
Not many people know that we offer short-term leasing as it is not one of our most popular forms of leasing or finance, but we do offer it.
So in this article, we are going to talk about how a short-term lease works, the pros and cons, and the reasons why it might be good for the situation you are in.
What is a short term lease?
A short term lease is different to a daily rental, which is where people sometimes get confused.
A short term lease is longer but not as long as a standard lease. They are usually between three to twelve months. Only a small amount of financial information is required and you can often get a car much quicker than if you were to get a car ordered on a long term lease.
It is often less money to have a short term lease than a daily rental, but it can sometimes be more expensive than if you were to get a long term lease.
What are the pros and cons of a short term lease
There are plenty of advantages to short term leasing including;
- It allows for small commitment
- This is hugely beneficial for those in certain situations, of which we will go into further on in the article
- Maintenance and road fund licence is included in the cost
- This means that any servicing and wear and tear items are included in the price which makes for easy budgeting
- Reduced underwriting criteria
- You don’t have to provide as much financial information which means that it is good for those with a bad credit score, again something we will go into more detail about below.
However, there are also some disadvantages. These include;
- It tends to be more expensive than long term leasing
- This includes lease contracts such as Contract Hire
- You are limited to a number of cars
- They also might not have the specification you want
- Insurance is more on a short term lease
- This is because you are more of a risk, so the insurance is higher
Who is short term rental suited to?
There are some situations in which a short term lease is perfect for you.
One of the most common reasons people need a short term rental is if their current lease car is due to go back before their new lease car is going to be delivered.
If you get a factory order lease car, then this can take a number of months to be built and delivered. Sometimes this means that you might be without a car for a few months while you wait for your new car to be delivered. A daily rental is the most expensive option in this case, therefore a short term rental is the perfect solution in this scenario. You can have your short term rental for as long as you need, up to 12 months, and then hand it back when the new lease car arrives.Another scenario in which you may need a short term lease is if you are a business and you are taking on contract workers or a new employee who is on probation. With these types of employees, you don’t want to commit to a long term lease, contract employees might not be there for long enough and it might not work out with the new employee. Therefore, a short term rental is a great solution in this situation as you can hand the car back much earlier. If it works out with the new employee and they stay then you can look at getting a longer term lease.However, there are less financial requirements for a short term rentals which means that you could get approved for a short term rental. If you have a CCJ that is about to fall off in say, six months or so, and you need a car, then a short term rental is something that you might want to consider. You can have a short term rental for six months and then once that time is up and your CCJ has fallen off, you can apply for a longer term lease. This is also beneficial because if you make the payments on time, then you increase your credit score. It’s a win-win either way.
Can I get a short term rental if I have bad credit?
There is a good chance that you can get a short term rental if you have bad credit because you don’t have to provide as much financial information. We advise speaking to an experienced vehicle broker about your financial situation before you make a decision as to whether you are going to go for a short term rental or not. You may have to pay more monthly or put down more initially, but you still have a chance at being able to apply for a short term lease.
Where can I get a short term rental?
The best place to get a short term rental would be an independent vehicle broker who will be able to get in touch with various companies that do short term leases. They will look at your financial situation and what you want in a lease car and will be able to find the best deal for your situation. Daily rental companies like Hertz do not do the short term leases we are talking about and they can be costly if you do have a daily rental for several months.
Therefore, going through an experienced broker is your best bet when you are looking at getting a short term lease.
In conclusion, a short term lease is not a daily rental, but instead where you lease a car paying monthly payments for between 3 and 12 months. It is perfect for a range of situations including if you are waiting for your new lease car to be delivered or you need a vehicle for an employee on probation or if they are contracted in for a short period of time. It is also great for those who want to lease a car in the long term but have a CCJ that they are waiting to drop off their credit score before they lease, so are looking at a short term lease instead. Hopefully this has given you some idea of what a short term rental is. As we said, we are able to offer short term rentals, so if you have any other questions please do not hesitate to contact us.