If you like to change cars often or only need a new car for a short time, one option is short-term car rental. Renting a car is also sometimes known as Personal Contract Hire (PCH) and is growing in popularity. The advantage of short-term car leasing is that it’s a quick way to get behind the wheel of a new car with minimal commitment, but it can also be expensive.
Leasing is more like leasing a car than other forms of car financing, and you will never pay the value of the car or be able to own it. Short-term rental can last from one to 24 months. 90-day contracts also exist and often don’t require a credit check, but reasonable deals can be hard to come by.
Short-term car rental costs
That can be handy, but short-term car hire also tends to be expensive, and even the cheapest short-term rentals start at £200-300 per month. Of course, the longer the lease term, the lower the monthly repayments are likely to be. However, despite the higher payments, a short-term lease might work out cheaper if you need the car for a shorter period.
It’s worth considering your usage, as leasing deals tend to have a mileage cap – the more affordable deals will have lower annual mileage agreements (typically 6,000-8,000 miles per year).
Many short-term rental deals will require you to make a large upfront payment, but even if you don’t, that’s probably factored into the monthly cost anyway, so it’s worth looking into total expenses before falling under the spell of zero deposit. OK.
Short term car rental alternatives
Rent a car
Short-term rental is similar in many ways to renting a car, and while renting isn’t the cheapest way to get behind the wheel, you might find it’s cheaper in certain cases, and you will not be bound by a complex financial agreement. Some car rental companies allow you to rent a car for months, while others may even accept a full year. For a few months, a car lease might work out cheaper, although you can choose from a smaller range of cars than with leasing, and they won’t necessarily be new.
Car sharing programs
If you need access to a car more sporadically, you might consider subscribing to a car-sharing service like Zipcar and DriveNow. These car-sharing clubs can allow you to use a car as you need it, rather than on a daily or monthly basis. If you don’t need constant access to a car every day, this might be more cost-effective. Many now offer access to electric cars which can reduce your running costs, although a car-sharing club may not be an option outside of built-up areas as they are more common in cities. You also need to drive to where the car is parked, so it’s essential to check how many cars are available in your area before subscribing.
Buying a cheap used car
Sometimes the old way of buying a cheap used car can be the best option. You might find that you can buy an older, reliable car for the equivalent price of three months’ short-term rental, and that’s before you factor in the high upfront costs. Of course, you’ll miss out on the newer models and if image is particularly important to you, then a cheap second-hand runabout might not appeal to you. However, it can make much better financial sense, especially if you can sell the car and recoup some of the costs when you’re done.
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If you’ve decided to buy a used car, check out our guide to buying a used car…