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Understanding The Difference Between Renting and Leasing

posted on Aug 05 2014 by Kiri Nowak

Understanding The Difference Between Renting and Leasing

One of the key problems when it comes to car leasing is a lack of understanding. Even though leasing has been around for years, many people still don’t really know what it is. 

The main thing that leasing gets confused with is car hire and renting. Are you new to the world of leasing and want to understand more about what it actually is? Read on to find out.

Period of time

The main difference between leasing and renting is the period of time you have the car for. If you rent a car it may only be for a few days or weeks. However, with leasing you have your car for two, three or four years. It’s a long term leasing contract that enables you to have a brand new car at an affordable price.  

Car hire businesses exist so that people can hire a car for a short period only. People do this for a number of reasons, for example if they are on holiday and need a car or if they are temporarily unable to use their own car. Some people will also hire a luxury or sports car for a special occasion such as a wedding or a birthday treat.

You choose your vehicle

With renting you have to select a vehicle from a selection of vehicles available for hire. Leasing is very different in this respect because you get to choose your car and have it ordered to your door. You can select whatever colour, make, model and specification you like. Although you do not own the car for the leasing period it definitely feels like your own car.


When you rent a car you will probably pay the lump sum of the rental cost either when you place an order or when you return the vehicle. When you lease a car you will need to fill out a finance form so that you can get credit. You will then pay a deposit for the car and then pay monthly instalments. The monthly cost depends on what sort of car you choose and how much you are able to put towards the deposit.


Both leasing and rental companies will often have a mileage limit. When you lease a car you can choose a lease deal based on the amount of mileage you do. You will then be expected to stick to this mileage limit for the duration of your lease. Some car hire and rental companies have a mileage limit for the rental period that they will make you aware of before you get the car. You can often pay more to be able to do more mileage.

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