Answering your questions when comparing with leasing

Still on the fence about whether to take a car on a long-term lease or an operating lease? We've looked at the tables and defined the situations in which each service is more worthwhile.

Due to a lack of funds and current uncertainty about your future, you may be considering renting a car instead. This is nothing new in Slovakia, and nowadays the offers for renting cars via e-shop look really tempting.

Cars from €25 per day for a short-term rental, €170 per month for a long-term rental or €180 per month for an operating lease? Let us show you the real costs of both financing methods.

How long-term car rental works

Long-term car rental is particularly popular due to its flexibility and the freedom it gives the customer. For example, many people will also use long-term rental as a service to bridge the period while waiting for a new car to be delivered.

When it comes to long-term rental services, all fees, taxes, vignette, tyre changing, servicing and insurance are included in your monthly rental fee.

This type of lease is suitable for individuals, self-employed, but also for large companies, mainly due to the time saved in dealing with all the formalities for the acquisition of the vehicle or the subsequent sale.

With a long-term lease, you pay the same amount of rent for the entire duration of the lease agreement. Car rental companies offer different time horizons for renting a vehicle, Long term rental is considered to be from 1 month to 12 or 24 month contracts.

As far as the responsibility for the car is concerned, with both methods of acquiring a vehicle, you as the lessee are fully responsible for the vehicle. However, in the event of an accident, the breakdown insurance serves to ensure that you are only burdened with the amount of the deductible, the rest of the cost is covered by the insurance company.

What if my long-term lease is coming to an end?

At the end of the lease contract, you can extend the length of the lease or, if the lessor allows it, buy the vehicle outright for the residual price including accessories.

Speaking of handing over the car, you must remember one important rule - always hand over the car with the tank capacity you received it with. We'll take a closer look at the comparison in the price comparison section to see which way of acquiring a vehicle works out better.

How operating leases work

With an operating lease, you don't own the vehicle during the term of the contract or at the end of it. However, at the end of the contract you have the option to buy the vehicle at the agreed and market residual value. The lease price is calculated at the beginning based on the mileage you choose, the input prices and cost items, the residual value of the vehicle and the period for which the lease is concluded. At the end of the contract, you return the car to the leasing company as if it were a long-term lease. However, it is a disproportionately longer term than a lease. Usually, an operating lease is concluded for 48 or 60 months. In addition, operating leases are only available to legal entities, i.e. entities that have a registration number.

In an operating lease, you also pay a fixed amount throughout the term of the lease.

What to watch out for ?

Before concluding a deal, the leasing company checks the creditworthiness of each single legal entity to set the deposit or cash collateral, which is usually necessary to conclude the deal. This is based on the available financial resources and indicators about the entity, such as assets, property, equity, economic results, etc. Based on these parameters, it finally determines what amount of security is necessary to close the deal and order the vehicle.

Price comparison: How much will I realistically pay?

Let's take the example of a Hyundai Kona. The leasing company applies an average discount of 10% on a vehicle worth e.g. €24,000. The purchase price of the vehicle is €21,600.

When you lease a vehicle, you can benefit from the rental company's more favourable terms on the purchase of the vehicle, which has a price about 20% lower, i.e. an average of €19,200. Adding up the monthly costs for insurance, servicing, tyres and tax, you arrive at €154/month.

Considering the amount of the discount that the rental company benefits from, as well as the selling power of a shorter vehicle ownership, the total monthly cost comes out to around €179. In addition, it is essential that you commit to a longer lease term, in this calculation it was 3 years.

...Quick answer to your question

So, if you are deciding between a long term vehicle lease and an operating lease, first answer the questions:

When do I need the car?
How long do I need the car for?
What kind of vehicle do I need?
What is my budget for acquiring the vehicle?

If you are looking for a vehicle right away, looking for flexibility and don't need a car configured exactly to your liking in a configurator and waiting 6 - 9 months for it, but can adapt to the market and the lessor's advice, a long term lease is the right choice for you. The services included in both methods of acquisition are completely identical, in the case of a long-term lease you have the opportunity to drive a new vehicle much more often without worry.

If you are thinking about choosing a vehicle for a long term rental, take a look at our fleet offer.

LONG-TERM CAR RENTAL OR OPERATING LEASE IN 2022?