Short Term Lease Cars vs Car Hire: Which is Cheaper in the UK?

Every summer millions of Brits stuff sandals and sunscreen into suitcases, and leave our sceptred isle for sunnier shores. Whether flying to somewhere familiar, or striking out off the beaten track, holidaymakers everywhere often make their first stop after passport control the car hire counter.

But car hire isn’t just for a holiday. Whether your own car is undergoing repairs, you need something smarter for a business trip, or you’re hiring a larger vehicle to get a job done, car hire is the go-to option if you need a car for a matter of days.

The question is: what if those days stretch into weeks, or even months? You can hire a car for that long, but is it the smartest option? If you need a vehicle for more than a month, it might be worth looking at short term lease cars as an alternative to rental. Both have their advantages, but which offers better value? Let’s break it down.

What Are Short Term Lease Cars?

Leasing a car for a short period might seem at first to be a bit intimidating. Conventional car leases typically last for years at a time, and we’ve been conditioned to think they are an alternative to car finance and ownership rather than rental. But as Brits lead increasingly fast paced lives short term car leases are becoming increasingly popular, and a proliferation of companies offering them have popped up.

Some short term car leasing companies offer what are essentially traditional car leases but for shorter periods, typically 12, 18 or 24 months. While these can be great options they aren’t really alternatives to car rental. Other short term car lease providers run a fleet of cars, and offer leases for monthly terms starting from as little as 1 month. These are a great alternative to car rental.

Why People Compare Car Hire to Short Term Lease Cars

Hang on. A fleet of cars available to take for a short period; that sounds like car rental! Yes, in many ways fleet based short term car leases are like car hire, and people are right to compare them. But they differ in 2 crucial ways – they use regulated lease agreements rather than 28 day hire agreements, and they’re based on monthly pricing models, not daily rates.

That’s quite a lot of automotive industry jargon, so what does it mean for you? Firstly additional consumer protections if you need a car for several months. Car hire companies use unregulated 28 day or 86 day hire agreements. As these are unregulated the car hire company can ask for the car back at any point. When you sign a lease agreement by contrast it’s a binding contract, so the lease company can’t simply demand the car back.

Secondly short term lease cars are priced by the month, as opposed to hire cars which are priced by the day. Because you’re making a monthly commitment, the monthly rates for short term car leases are typically considerably lower than the cost to hire a car for a month or two. Be aware though, because you’re committing to a whole month if you return the vehicle within the month you won’t be refunded for any unused days.

Cost Comparison: Short Term Lease Cars vs Car Hire

Anyone who has shopped around for long term car hire will know that getting an accurate price comparison can be surprisingly difficult. At mycardirect we offer daily car rental as well as short term car leases, so to get a fair comparison we’re using our rates for both. Here is a comparison for a Volkswagen Golf.

As you can tell if you only need a car for 1 or 2 months, renting a car may be the best option. If you need a car for more than a couple of months however, a short term lease becomes the clear choice.

Benefits of Short Term Lease Cars Over Car Hire

Let’s not beat around the bush, the principal benefit of a short term lease over hiring a car for multiple months is that it’s significantly cheaper to lease than to rent. Because short term lease companies know the car will be out for an entire month, there is less downtime than conventional car rental, and the lease company can lower the monthly price accordingly.

Another big benefit is that you can choose the precise car that you want. When you rent a car you typically choose from a class of cars, with the specific vehicle decided by what the car rental company has available at the time. When you opt for a short term lease by contrast, you get to choose the precise car that’s right for you.

Unlike long term rental you can also take the car for more than 3 months at a time, without needing to take it back to the rental company to be checked and re-rented. If you know you’re going to need a car for several months, and are happy to move from daily to monthly flexibility, then a short term lease car is the right option for you.

When Car Hire Makes More Sense

There are still a lot of circumstances where long term car hire makes more sense than a short term lease, principally if you need a car for less than 2 months. If you need a car for say 6 weeks, you may well be better off renting than starting a short term car lease, as if you were to start a 2 month lease you would pay for 2 weeks where you won’t be using the car.

Another aspect to consider is insurance. When you hire a car insurance is included in the rental price, but when you lease a car, it is not. There are lots of short term car insurance options available, and it isn’t anywhere near as expensive and difficult to arrange, as it once was. Even so if you want to keep everything in one place and avoid the hassle of arranging your own insurance, it may be more cost and time effective to opt for a rental rather than a lease depending on your circumstances.

A final item to consider is approval and credit checks. As a lease is regulated by the FCA, the lease company has obligations to ensure you can afford the vehicle – even for a short term lease. If you have poor credit or CCJs, you likely won’t be eligible for a short term car lease. Likewise if you are applying for finance or credit in other areas like a mortgage, you may not wish to undergo further credit checks. Whilst car hire companies have their own requirements (particularly around age, occupation and driving convictions) they do not underwrite based on credit checks, so if you have concerns about these a rental might be a better option for you.

Which Option Is Right for You?

Cars aren’t one size fits all, and one person’s dream car can differ radically from someone else’s. In just the same way, the ideal way to get behind the wheel is going to differ based on your requirements. If you need a car for less than 2 months long term car hire might well be the option for you, as you won’t have to go through the hassle of credit checks and arranging insurance, though you may have to pay a little more in absolute terms.

If you know you’ll need a car for more than 2 months a short term lease car is probably the best option. You’ll get to choose the exact car you want, won’t run the risk that the hire company will demand it back at an inopportune time, and almost certainly save money compared to a rental.

Conclusion

Car hire and short term lease cars both have their place, but the right choice depends on how long you need the vehicle for. If it’s just for a few days or weeks, hiring is often the simplest option. But once your needs stretch beyond a month or two, the numbers (and the added protections of a regulated lease agreement) start to make a short term lease the smarter choice.

At mycardirect, we offer both short term leases and traditional car hire, so whether you need a car for days or months, we’ve got you covered.

Use the buttons below to explore short term lease cars or our car rental site.

Short Term Lease Cars                                  Car Hire