Rental car

Blog | Car Credit | Credit

Which financial solutions?

Usually if you can’t or don’t want to purchase your rental car cash, you could choose between a credit or a leasing. The consumer credit consists of a loan towards a bank, that you could reimburse upon a duration of 12 to 72 months. The leasing consists of a vehicle borrowing where you are financing the impairment loss of this one as well as the interests.

The leasing cost for a rental car?

When it comes for rental car the leasing is usually less interesting than for a new car. Indeed:

  • The interests rates proposed are often higher when the vehicle cost is lower. So for a rental car, which is often more cheaper than a new vehicle, you will proportionally pay, more.
  • At the end of the contract it is possible to redeem the vehicle to the cost of its residual value. In case of a new car the cost difference its interesting: the residual value is lower than the original cost, the vehicle losing rapidly is value. For a rental car, already well used the vehicle cost doesn’t have as much depreciation. The car will be as expensive at the end than at the begining of the contract.

The credit cost for a rental car

If it is sometimes difficult to evaluate the cost difference between a credit and a leasing we can say that usually a personal loan is more advantageous with a short duration. When you are purchasing a rental car for example you can usually effectuate the repayment upon 12 or 24 months. With a duration of 12 months only, the credit is more advantageous than a leasing, whatever the interest is.

Cost example for a rental car

For example a rental car of 5,000 Chf financed with a personal loan upon 12 months will generate the following costs: an average fixed monthly cost of 440 Chf, and a total interest of 260 Chf only.

Requesting a credit

Before committing yourself the better way to do is to be informed regarding the costs. In case of interest a specialist could propose you a free-non binding offer, whether it is for a rental car or a new one.

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