The wind blows in favor of the rental in the long term: this is the orientation both of the customers but also of the dealerships themselves that “suggest” this formula as one of the most convenient, at least as far as private citizens are concerned.
As we know, an owned car, an instant after being bought and put on the road, has already lost 10-15% of its value. Eight or ten years later, even if in perfect condition and without any scratches, if it is still worth a few thousand euros, it is dripping grease. And if you decide to buy another car, start the usual process again like a dog chasing its tail. It is for this reason that, for some years now, many private individuals (but also companies and VAT holders) have abandoned the idea of owning a car forever a car in favor of more “lean” and convenient formulas, such as leasing or long-term rental.
Leasing or long-term rental? Here’s how to choose
As anticipated, it is one question that companies and VAT number holders are asked when evaluating the best formula to purchase a vehicle for business but also personal use. The assessment must be made taking into account not only the monthly driving cost (refueling), but also the typical operation of each of the two formulas.
Leasing. Leasing is a formula similar to the purchase of the car in the sense that the concept of possession is maintained but also guarantees numerous tax benefits to companies and VAT numbers. From a fiscal point of view, the legislator has preferred to level the benefits, which are the same even for long-term rental and depend on the personal needs of each customer. But how exactly does it work? In this first option, the vehicle has two owners: the Lessor (which is the finance company that buys the asset by anticipating the cost) and the tenant, who is the customer who is granted use of the vehicle upon payment of the monthly fee. The tenant can choose the vehicle according to his preferences and remains co-owner until the expiry of the leasing period. Depending on formula option, optional services (insurance and maintenance packages) that the tenant pays in the monthly fee can be included. Upon expiry, you can decide whether to redeem the vehicle or return it to Lessor who will resell it through its channels. Of course, in both cases the lessor can decide to open a new lease. This formula allows holders of VAT number to take advantage of the tax advantages provided by the regulations. In recent times, leasing formulas for private customers have also spread, which, however, it should be emphasized, cannot benefit from any tax breaks.
Long-term rental. In recent years, however, the real interest has manifested itself in the rental in the long term: even, some car manufacturers openly invite their customers not to buy the car, but to rent it. It is certainly also an excellent communication choice since many builders own or directly control the rental company that proposes the offer. But how does the “freight” work? As you can also read on the blog finrent.it, if in the case of the leasing the tenant is also the co-owner of the vehicle, in the long-term rental the concept of ownership of the asset in favor of use is completely overcome. The clienttherefore, he pays an “all inclusive” fee to use the vehicle and all related services but never becomes the owner. Also on this occasion, it is the conductor a to choose model and accessories: the most complete rental formulas include all insurance coverage (including Tca, Theft & Incrire, Kasko and Driver’s policy) and maintenance (both ordinary and extraordinary). In addition, additional optional services are available. At the end of the rental period, the tenant returns the car to the renter without the possibility of redeeming it but can sign a new rental agreement. As with leasing, however, there are no tax benefits for private customers.
Which formula is convenient? Talk to the expert
“First you have to see who is who purchase: if a private client, a freelancer, a private company or other. Some might be better off leasing, others long-term rental “says Leonardo Marchini, who takes care of the DS sales department in Milan. He has no doubts, however, on what should be done to individuals.” The rental of the car is definitely worthwhile. as regards its future value: the convenience of having a fixed cost (and of course) is optimal for a private individual but also for those who have a VAT number because you know exactly how much you spend “.
Find the differences. Clarified that in key tax the two formulas are equivalent, in order to choose between leasing and long-term rental it is necessary to evaluate their operations and the actual needs of the customer. A first, important difference is that the rental guarantees certain costs: since it also covers imponderable events, such as accidents or mechanical breakages, it protects the tenant from unexpected expenses. The other one difference it plays on the concept of ownership: leasing allows the redemption of the vehicle and you become the owner in all respects, thus becoming the ideal tool for those planning a long-term use of the vehicle, even after the expiry of the leasing period. For the same reason, long-term rental is the perfect option for those who are only interested in using the asset and want to avoid the hassle of managing used equipment, including depreciation and resale.
What is convenient? “Generally speaking, the rental has become more and more the most chosen form: all the car brands have structured a much cheaper rental formula, up to 5 years ago it was much more expensive “, Marchini tells us. So, what is the convenience of a rental versus a lease? “The rental formula does not provide for any ownership of the asset while leasing, however, is a promise to purchase. Already this, on a level tax, it makes a certain difference – he adds – At the end of the lease I will have a plus or a minus value if I decide to redeem the car or not, while in the rental sector I never have this problem because it is never a fixed asset, it is a service in all respects and, as such, I will have a much simpler and more complete tax management because I will be able to deduct the costs: for example, a sales agent can download it 100%. “In short. a leasing is more challenging because, at the end of the period, the tenant will find himself managing the difference in the actual value of the machine at that moment.
The quality of services. Another point in favor of rental in the long term it concerns the quality of the services offered. “For example, if you offer a leasing that satisfies all the services such as maintenance, warranty, RC car, but for the Kasko I cannot choose the levels of deductible because there is a standard. In the rental, however, we give the possibility to bring the deductible at 350 euros or even reset it “, explains Marchini. Another difference that the seller told us concerns, instead, the typology leasing: some customers do it with their bank, and the bank may offer cheaper rates than dealers. But, in this case, the lease that is offered by the bank is a lease with a redemption that never goes beyond 4%. The customer, therefore, is as if he were making a loan: “We and many other dealers offer leasing with guaranteed redemption, that is, customer redemption is not mandatory.”
Why are fewer cars bought?
Owning a car, owning it, is a luxury that fewer and fewer Italians can afford. Leonardo Marchini has provided three possible reasons. “The first is there tranquility: the commitment you have in managing a car is enormous, the more it is reduced the better. Translated: with a rental fee, whatever happens, the customer can feel comfortable. “The second reason, as mentioned at the beginning of the article, lies in theuncertainty than the car will be worth after a few years. “If I buy a diesel today, I have no idea how much it will be worth in four years, it is totally different than a few years ago. In rental, however, I can ignore the change in value in four years”. The last motivation lies in the purely side cheap: “On average, a private individual is used to keeping a car for 8 years at the end of which he will again find himself in the situation of having to buy another one. If he has paid for it in five years with a loan, he will have spent a number” X “for the annual management of the car. If we do the sum of the management of the car and the cost of the car by subtracting the present value of the car, a minimum recovery comes out at the end of the eight years”.
Same expense but for two cars. This is why the solution winning, could lie in the long-term rental. “Do the math, it turns out that if I had made two rentals, each for four years, at the end of the eight years I would have spent the same amount or at most 10-15% more but with all the benefits of the case: having changed two machines and having used the services with fixed costs without any surprises “, he explains. In essence, a car, even if it is an object made up of a perfect combination of comfort and safety, has “the defect that it is a consumable good. In eight years it will have almost completely lost its value”.
Here are the new perspectives. But what if the customer wants a different formula from those proposed? “We have already developed a solution, always for hire, but with more freedom for the customer who wants to get closer to the world hybrid ed electric – Marchini concludes – we give him the opportunity to drive the car for a year, see how it is and allow him to replace it if he decides that it is not a perfect version for his needs and wants to go back to the thermal version “. In this case, then , with a three-year contract (36 months), after only one year you can return the car and go back to the one with the classic refueling (petrol or diesel).
Another tempting novelty lies in the rental of an electric car: given the numerous criticalities of finding control units to recharge them, if the customer decides to embark on a long summer trip, he is granted the possibility of to change the car (back to diesel) and travel without having to worry about battery life. The refund will then take place upon your return.
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