Long Term Rental (LLD) and Lease with Purchase Option (LOA). Their names are similar, they deal with car rental but yet there is a difference in size. The Credither Guide presents these two solutions.
Long term rental
It is simply a rental car, pure and simple. In other words, you rent a car for a long time, then return it at the end of the contract.
The advantages of the car LLD ?
- The rent does not move for the duration of the lease;
- The subscription of packs including rent, auto insurance and maintenance is possible;
- You do not have to worry about selling the vehicle;
- You are certain to use a recent vehicle.
Conversely, the LLD is also a solution that has drawbacks:
- a mileage is fixed and can not be exceeded, under pain of penalties;
- no possibility of buying the vehicle definitively, you will have to return it;
- in case of breach of contract, compensation may be claimed by the rental company.
Rent with option to purchase
Solution used in particular for the rental of a vehicle, the LOA auto has similarities with the LLD, however with a “small subtlety “: the tenant can buy the property at the end of the rental period. If this is the case, he must pay the residual value of the contract defined in the contract.
The LOA auto is offered by dealers and financial organizations. It is therefore an ideal solution for drivers who can not buy a car immediately or who are reluctant to become owners.
The transaction includes different fees:
- a personal contribution is required by the LOA company;
- auto insurance must be underwritten;
- the registration of the vehicle is the responsibility of the driver;
- the same for the maintenance of the car;
- charges related to a possible mileage violation can be applied.