Cars and SUVs are very important for businesses. Comfortable traveling is necessary for employees or partners to navigate to or from work. So, the debate goes on about whether to go for monthly car rental in Dubai or purchase cars for the business. Both options have their strong and weak points. For many businesses, the responsibility of ownership may be too much.
While long-term monthly business car rental is almost completely responsibility-free, it may not be the ideal option for many preferences. However, new startups and small businesses will favor long-term car rental options. We have discussed both options in great detail below. Read to the end to learn more about which option is the best solution for your business:
Benefits of Long-Term Car Rentals
Maintenance and Repairs Are Done by the Rental Company
Long-term business car rental is a very responsibility-free option. If your business rents a car for the long term, it will never have to worry about maintenance and repairs. The car rental company will be responsible for the maintenance and repair of the car. Also, periodic and scheduled maintenance provided by the rental company will eliminate the need to maintain a team of mechanics.
Insurance Is Included in the Rental Price
Another great benefit of long-term car rentals is that your business will not have to worry about insurance. Driving a business car without insurance is never a good idea. So, car rental companies will offer insurance included in the rental price. This peace of mind will make driving your business cars a much more convenient option at no added cost.
Access a Large Fleet of Cars
When you have a working relationship with a well-established car rental company, you will have access to all of their fleet. So, whether you need sports cars, sedans, SUVs, or any other commercial vehicles for an urgent requirement, all options will be available. Additionally, your business will be able to swap the rented cars for better, more suitable ones for specific road trips and journeys.
No Depreciation and Upgrade Worries
One of the biggest benefits of renting long-term business cars is that your business will never have to worry about depreciation. In most markets, a depreciation of over 10% annually is seen in cars, SUVs, and other vehicles. Also, the business will never have to worry about upgrading the fleet as well. The rental company will be responsible for all of these.
Limitations of Long-Term Car Rentals
No Business Asset Build-Up Going Forward
One of the biggest drawbacks of renting your long-term business cars is that it will not build up any assets at all. As soon as you return the rented car, it is no longer an asset for your business. All the rental payments you put in will also go to a potential waste.
Ongoing Cost for the Business
Renting a long-term business car is an ongoing cost for the business. Along with all the other business expenses, you will have to manage this one on an ongoing basis as well.
Benefits of Purchasing Business Cars
Asset Build-Up for the Business
Of course, you will have to spend money with an up-front deposit even when leasing business cars. Also, monthly payments with the lease will be included. However, whatever money you put in will be available as an asset when you eventually sell the car. So, buying business cars builds up assets over time.
Not Mileage Limits and Conditions
Car rentals, even long-term packages, come with daily mileage limits. Exceeding the set mileage limit can result in additional fees and fines. However, with totally business-owned cars and SUVs, there is no such restriction at all. The cars will be at your business’s disposal when and where required.
Limitations of Purchasing Business Cars
Depreciation and Upgrading the Fleet
Of course, the biggest concern with managing a large business fleet of cars, SUVs, and vehicles is depreciation. Cars and vehicles lose money over time. A safe 10%+ annual value loss can be predicted with all business-owned cars. Also, businesses will need to sell the existing cars and upgrade to newer models every so many years. These costs are high when talking about a large fleet of cars and vehicles.
Too Many Invoices to Take Care Of
When your business buys many cars or vehicles, there will be too many invoices to take care of. Monthly payments, insurance, maintenance, repair, and many other invoices will be involved. This can be overwhelming for a growing business. A team of mechanics or maintenance supervisors will be required to manage the fleet as well.
Too Expensive for New Startups and Small Business
Buying many cars for the large fleet requirements can be very pricey. Especially in the case of new startups and small businesses, managing a large upfront deposit can be substantially difficult. Instead, renting cars will be much cheaper on a long-term basis. A fast car rental service will always provide cheaper access to a large number of cars, SUVs, and commercial vehicles.
Should You Rent Long-Term or Buy Cars for Your Business?
So, should you rent business cars with long-term plans or buy them? Considering all of the above-mentioned factors, long-term car rentals are a winning decision. It will provide responsibility-free access to a large fleet of vehicles that will provide unmatched flexibility and versatility. Also, car rental solutions are much more affordable for new startups and small businesses as well. So, if you have an established business, surely look at buying cars for the business. In the early stages, renting will be the
