Until recently, long-term car rental used to be taken up by international corporations and large companies. This method is becoming increasingly popular among small and medium-sized businesses—and not without reason! The times of having to own a vehicle seem to be far behind us. Buying a car tends to strain the smaller and medium organizations financially and may not always be commercially viable. Are you a small business? Instead of buying a car, you can consider a long-term rent. Find out how this form of car rental can be beneficial to your company!
First things first. What is small business car rental?
Long-term car rental allows renting a car for a specified time, whether one month or one year. The minimum rental period is 30 days, and there is no limit to the duration of the contract. There are times when small business car rental makes more sense than buying or leasing a car. Whether it is due to the seasonality of the small business (like operating only in summer), a significant employee turnover, or the need to maintain the cash flow, car rental comes with multiple benefits. Find out how it works and what are the main advantages below.
How is small business car rental different from leasing?
The two are very similar on many levels. Leasing and long-term rental are based on a car lease for a period indicated in the agreement, and in both cases, the car remains the property of the leasing/rental company. However, there are some crucial differences, too. The first one is that small business car rental relieves the car user from paying the operating costs. All the expenses— such as insurance, repairs, and maintenance—are paid for by the rental company. Thus, long-term car rentals are recommended for companies that prioritize ready-made solutions and ease of use. The second difference between long-term rental and leasing lies in the issue of car ownership. After the termination or expiry of the contract, the car is returned to the car rental or dealership. Under the leasing conditions, the vehicle is an asset of the company. Considering the loss of value of the car and the costs related to its exploitation throughout the leasing period, it is not necessarily an advantage.
On the other hand, renting the vehicle means that the car is only a tax-deductible cost rather than weights as a company asset, giving the small business more financial freedom.
The third difference is complete flexibility when it comes to the duration of the contract. Leasing always stipulates a minimum contract length, but the advantage of a rental is that it allows you to choose how long you want to have the vehicle for!
Now you know what a long-term car rental is, so let’s find out the main benefits!
Five benefits of small business car rental
1. Optimize your costs
One of the most significant benefits of long-term car rental is predicting the operational costs associated with running a car fleet. This allows the small businesses for easier budgeting and financial planning, ultimately simplifying their bookkeeping and strategy. The monthly rental fee tends to be much lower than the one incurred by purchasing or leasing a car and can be included as a business expense, leading to savings on a tax bill. What is more, unlike buying or leasing a vehicle, long-term car rental does not affect its credit score; neither does it freeze the capital or restrict the company’s cash flow. All the above factors considerably reduce the risk of running into financial problems, especially for small businesses with a less stable market position.
2. Deal with less paperwork
Another critical advantage of a car rental includes the convenience it brings. Instead of dealing with all the responsibilities associated with car-owning, all the user has to do is pay the monthly installments, refuel the tank, and take good care of the vehicle. SIXT sorts all the other issues like insurance, car registration, regular servicing, towing costs necessary in case of breakdown, and even the seasonal tire change!
Another great thing about long-term rental? The possibility to terminate the rental contract at any time, without incurring high penalties! Many small businesses operate on a seasonal basis, which means there is often no need to pay for a car all year round. Moreover, some have a significant employee turnover and do not require an entire fleet at all times. By renting a car, the company can decide how long they want to rent the vehicle for, be it a month, a season, or a year!
4. Comfort and safety
Unlike large corporate clients, small businesses may not have a number of staff dedicated solely to operations management, and often, the business owner themselves must ensure all deadlines are met. Owning or leasing multiple cars means that any additional responsibilities like keeping the servicing dates and paying for repair costs can lead to headaches and confusion. Long-term car rental takes away all these worries. At SIXT, we take care of the annual car servicing, all the repairs, and ensure the car remains safe to use. This leaves the business owner free to focus on the most important things: running the company.
Aside from optimizing the business costs and increased convenience and safety, small business car rental with SIXT brings much more comfort. Relax and enjoy our unique features:
- Many extras, such as air conditioning, GPS navigation system, cruise control
- Ability to access all our services in one place (SIXT rent, SIXT ride in the SIXT app)
- 24/7 customer service in case of any issues or questions
- Digital accounting and fleet management
- E-billing that allows for paperless and digital invoice filing
5. Choose a new model whenever you need it
The great thing about long-term car rental is that the company can tailor the contract to its needs. At SIXT, not only do we have one of the broadest range of cars on offer, but the customers can also request to exchange the car for a different model at any time, at no additional cost!
Finally, once the contract expires, the company is not left with an old car on its hands, which means it does not have to bear the responsibility to sell it at the end of the lease and does not risk the loss of capital associated with value depreciation. If the company still needs a vehicle at the end of the term, it can simply renew the contract and replace it with a newer model. This allows the business to regularly replace the vehicle with a new one, ensuring the highest degree of comfort and safety for their employees. Do not forget that a new and premium car with high-end features can be a great way to motivate your employees!
What are the costs of small business car rental?
The total monthly fee depends on several factors. Apart from the vehicle’s original value, the monthly cost depends on the amount of the voluntary upfront contribution and the duration of the agreement. The only expense borne by the lessee during the contract term is the fuel, as all the other operating costs are already included in the monthly fee. For exact prices, visit our website or SIXT app.
Without a doubt, a long-term rental is one of the most attractive forms of car ownership for a small business. As with leasing, all the monthly installments for a rented car can be classified as tax-deductible costs. What differentiates it from leasing is that this rental method allows the owner of a small business to save money by not restricting the cash flow, maintaining your credit score, and optimizing the monthly operations costs. Another financial advantage is the lack of servicing costs or depreciation risks. Visit our website or the app and book your car with us. Put your fleet in your pocket with SIXT!