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Until relatively recently, changing car most necessarily involved the acquisition of another vehicle, whether it is new or second-hand. However, for a recent years, renting of cars has begun to be an option that is increasingly being considered among individuals, something that in companies was fully implemented a while ago. A trend that may increase with the economic crisis.

 

So you may be wondering what might be the best option, buying a car or renting?

Renting consists of renting a car for a stipulated period of time, which usually ranges between two and five years, by paying a monthly fee. As with any other lease (such as a home, for example), the tenant does not own the car, so when the contract ends he returns it. However, there is usually a clause stating that it is possible to keep the car paying some amount. The contract also reflects the mileage limit which is included into the monthly fee. Normally, the excess of the milage is not so dramatic, but I would recommend you to check what would be the cost before signing the contract. 

 

Main advantages of renting over buying a car

For an individual, possibly the main advantage is that most of the expenses are taken care of, including insurance and maintenance. In addition to offering the possibility of releasing a new car every few years, while through the purchase it would be more difficult.

 

First of all, by renting, the initial outlay to acquire the car and the registration fees are avoided, and then the usual costs such as maintenance, possible repairs, insurance, tires, etc are included into the monthly payment. While in the purchase option the owner has to face all these costs throughout the life of the vehicle.

 

Through the option of renting, you also do not have to take care of certain administrative procedures, such as the payment of the circulation tax or passing the revisions such as technical inspection called ITV.

 

The major drawbacks of renting

Obviously, renting also has some issues. The first one is the cancellation of the contract. In many cases, if the tenant decides to cancel the contract before the expiration, it implies an economic penalty. In the event that the car is owned, the owner will have to put it up for sale and try to make the greatest possible economic benefit.

The second one, is the monthly fee, which is pretty high and in many cases is more expensive then owning the car.

 

On the other hand, in the case of individuals, it is not a disadvantage, compared to the purchase, but a disadvantage compared to the renting by companies or the self-employed / freelancer, the fee is deductible as long as the rented car is related to the activity they perform. On the contrary, in the case of individuals, the VAT on the fee is not deductible.

 

Therefore, choosing between renting or buying a car will depend on each particular case. As we have mentioned before, one of the key aspects to consider will be mileage, another financial security, since expenses are fixed through the monthly fee, but also, the time you want to use the vehicle or whether you want to be the owner or not. One formula is not better or worse than the other, they are simply different approaches to the same thing.

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