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 and Taxi In Tunbridge Wells is great in UK, whether you are an individual or if you work for your account or a company. We tell you the advantages and disadvantages.

Advantages & Disadvantages

Renting allows you to acquire a vehicle at the most reasonable price 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?

Let's define the “renting” process

Hand with a red toy car and car keys

Technically, leasing is not a purchase of the vehicle, but rather a long-term rental, with the possibility of ending the operation with a purchase or not.

For this reason, the person or company that uses this system does not own the vehicle, but it is managed by paying a monthly fee to the leasing company, which includes all the costs of the car, its repairs, and insurance.

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

Once the contract is finished, the private or legal person who is the beneficiary of the vehicle can always exercise an option to purchase it or restart another new contract, renewing the car and updating the operation again.

Red toy car on money

Renting for the self-employed 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 very diverse packages of 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 is a good option to have a vehicle quickly without the commitment of time of use. You can choose the necessary vehicle and return it to the decision without penalty.

Image with the crowd of cars placed in a row

Advantages

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

Since leasing does not appear on 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 vehicle in the short term.

Great variety of cars to choose from and multiple prices. You can choose at any time the car that best suits your circumstances and tastes.

Includes insurance in the fee, generally, the insurance is fully comprehensive with excess.

Professionals and the self-employed can also deduct the leasing fee from the Personal Income Tax Direct Estimation Regime, provided that the vehicle is related to the activity carried out.

There is no expense derived from the maintenance of the car, no revisions, no breakdowns, and no change of tires...

You do not have to pay any tax, nor 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 an entry fee or interest.

If you do not wish to change the car when the contract ends, you can extend the term of the contract or purchase the car for a fixed amount.

Disadvantages

It is also true that renting contracts have some drawbacks that should be known before making this type of contract:

The beneficiary of the contract is not the owner of the car at any time until defining, where appropriate, whether the purchase is made at the end of the rental.

The car must be treated in the workshop indicated by the contract leasing 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.

Renting companies only offer new products, so at the moment it cannot be applied to used vehicles.

You cannot 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.

Some hands holding some keys and in the background several cars.

In short, before a vehicle purchase or use operation, each individual, self-employed person, or company can correctly make 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 persons. And companies like Tunbridge Wells Taxi, although they also have obvious advantages for use by individuals.