Should You Choose A Long Or Short-Term Car Lease?

Car leasing provides access to a vehicle without the cost or commitment of an outright purchase. Choosing between a long-term and short-term car lease is a significant decision that depends on your needs, financial situation, and lifestyle preferences. This article identifies the fundamental differences between these two leasing options to help you decide.

When considering car leasing options, individuals typically weigh the advantages of long-term versus short-term arrangements. A short-term car lease, like those offered by Flexxilease, refers to a leasing agreement for a vehicle that lasts for a relatively brief period, usually ranging from a few months to a year. This provides greater flexibility and allows lessees to readily adapt to their changing needs.

Long-term car leases, spanning 2 to 5 years, often require a thorough credit check and entail lower monthly payments than short-term leases.

Whether you opt for a long-term commitment with lower costs or embrace the adaptability of short-term leases, you can find a suitable arrangement tailored to your preferences and lifestyles.

What are the benefits of using a short-term lease?

• Flexibility: Perfect for temporary needs like business trips or short-term projects, providing a vehicle when required temporarily.
• Low commitment: Unlike lengthy traditional leases, 3-month leasing offers a shorter commitment, allowing lessees the freedom to change vehicles more frequently.
• Cost-efficiency: Monthly payments for short-term leases are often lower than long-term ones, making it an economical choice for brief car needs.
• Maintenance: Many 3-month lease agreements include maintenance and servicing, easing lessees from upkeep responsibilities.

What scenarios should you choose a short-term lease?

Here are some examples of where to use a short-term car lease:

• Waiting for a new car to be delivered: If you have ordered a new one but will not be delivered for a few months, you can lease one.
• Temporary job assignment: If you have a temporary job assignment in a different city, a short-term car lease can provide you with transportation without needing a car.
• Travelling for work: If you are travelling for work and need a car for a few weeks or months, a short-term car lease can be convenient and cost-effective.
• Seasonal work: If you work in a seasonal industry, such as tourism or agriculture, a short-term car lease can provide you with a vehicle during your busy season.
• Test-driving a car before buying: If you are considering purchasing a vehicle but want to test-drive it for a few months before making a decision, a short-term car lease can be a good option.

 

What are the advantages of using a long-term lease?

• Stability: Long-term leases provide stability and predictability in monthly payments when compared to the possible changes that come with shorter-term leases, making budgeting easier.
• Lower monthly payments: Monthly payments for long-term leases are typically lower than those for shorter-term leases, as the cost is spread out over a longer period.
• Warranty coverage: Leasing a car for an extended period often means the vehicle remains under warranty for the lease, minimising the risk of unexpected repair costs.

What scenarios should you choose a long-term lease?

Here are some examples of where to use a long-term car lease:

• You need a car for over a year but don’t want to buy one.
• You want to drive a new car without worrying about maintenance or repairs.
• You want to be able to switch cars every few years without having to go through the hassle of selling or trading in your old car.
• You have a poor credit score and do not qualify for a traditional car loan.

Leasing a car can be a good option if you need a car for an extended period but don’t want to deal with the hassles and costs of ownership.

Are monthly payments different for short or long-term car leases?

Yes, the length of a lease contract can affect the monthly payments. In most cases, the shorter the lease term, the higher the monthly payments. This is because the leasing company spreads the depreciation cost over a shorter period.

For example, if you lease a car for two years, your monthly payments will be higher than if you rent the same car for four years. The leasing company considers that the vehicle will depreciate more quickly in the first two years.

What’s the best car leasing option for you?

Your choice between a short-term and long-term car lease depends on your requirements and situation. Opt for a long-term car lease if you need a car for over a year but don’t want the cost or commitment of buying outright and want to keep your costs below those of a short-term lease. On the other hand, if you’re waiting for your new car to arrive and/or your situation requires a car for less than a year, then a short-term car lease is the more suitable option.