Whether you're choosing long-term rentals or car leases, don't just rely on monthly costs. We'll uncover hidden pitfalls like taxes, insurance, and early termination fees through actual quote comparisons. Find the contract terms that best suit your needs right now.
What's the difference between long-term rental and lease?
Long-term rental and leasing are both ways to use a car for a certain period of time without purchasing it, but there are subtle differences.
Key Differences at a Glance
| division | long-term rental | Car lease |
| license plate | ‘'Ha, Heo, Ho' (rental car license plate) | General license plate |
| Car Purchase Topics | rental car company | Capital company |
| premium | Included in rental cost | Separate registration required |
| Maintenance | Support from rental companies | Direct burden |
| mileage limit | No restrictions | Limited to 30,000-40,000 km per year |
| tax benefits | Cost processing possible | Expenses can be processed (financial leases can be included as liabilities) |
| After the contract ends | Returns are common | Acquisition possible |
To put it simply, Long-term rental is the concept of “borrowing,” while leasing is “buying on installments.”It can be seen as a similar method.
How License Plate Differences Affect Real Life
Long-term rental vehicles use rental car license plates that start with 'ha, heo, ho', so even if an individual uses it, other people can quickly tell that it is a 'rental car'.
‘Some people might say, 'What effect does this actually have?' There are definitely people who are very nervous and feel a sense of rejection.On the other hand, leased vehicles use the same license plates as regular vehicles.
“What’s the problem with having a rental car license plate?
Sometimes you may see signs in parking lots that say, ‘No rental cars allowed,” and there are definitely people who unconsciously have preconceived notions about rental cars.”
✅ For this reason If you care about your license plate, leasing is a better option.It could be.
Long-term rental vs. lease: which is cheaper?
So, this is probably the question most people are curious about. Let's compare the costs of long-term rental and leasing for the 2024 Carnival 9-passenger Prestige trim.
2024 Carnival 9-Passenger Prestige Trim Cost Comparison (36-Month Period)
| division | long-term rental | Lease |
| New car price | About 45 million won | About 45 million won |
| Monthly payment | About 850,000 to 950,000 won | About 750,000 to 850,000 won |
| security | Approximately 20% of vehicle price | Approximately 20% of vehicle price |
| premium | include | Separate subscription (approximately 100,000 to 150,000 won per month) |
| General maintenance costs | include | Separate burden (approximately 800,000 to 1.2 million won per year) |
| Actual 36-month total cost | Approximately 360.6 to 34.2 million won | About 31.8 to 36 million won |
✅ A simple comparison shows that the monthly payments for a lease are cheaper. However, When you factor in insurance premiums and maintenance costs, long-term rentals are often more economical..
The difference can be even greater when you factor in the unexpected costs of vehicle maintenance.
💡 Please note that Carnival is a popular model every year, so prices may vary depending on options or trims. Also, the delivery period and waiting period may change frequently every month, so please be sure to check additionally.
The Difference Between Insurance, Maintenance, and Hidden Costs
Advantages of long-term rental
- Insurance is included in the rental fee, so there is no additional burden.
- The rental car company provides support for regular inspections, replacement of consumables, and accident repairs.
- In the event of a vehicle breakdown, a replacement car service is often provided.
Disadvantages of Lease
- You must purchase separate insurance and bear all costs yourself in the event of an accident.
- You must pay all maintenance costs yourself, including tire and brake pad replacement.
- Unexpected breakdowns or repair costs may occur.
So, if you don't want to worry about vehicle maintenance or want to avoid unexpected expenses, long-term rental is a much more convenient and reliable option.
Mileage limit, how much do you drive?
For those who frequently drive long distances, mileage limits are a very important consideration.
- Long-term rental: No mileage restrictions or very generous mileage restrictions.
- Lease: Typically limited to 30,000 to 40,000 km per year, with additional charges incurred if exceeded.
💡 Long-term rental is more advantageous for those with long commutes or who enjoy frequent weekend drives.You can do it.
Tax benefits, take note if you're a business owner!
There are also differences in taxation between individual business owners and corporations.
- Both long-term rentals and leases can benefit from tax savings through expense treatment.
- However, in the case of financial leases, they may be recorded as liabilities and thus may affect the financial statements of the corporation.
💡 If you look at the tax benefits alone, both options are similar, but, If you are sensitive to the company's financial status, long-term rental is more advantageous.You can do it.
What if I want to keep the car after the contract ends?
What you want to do with your car after your contract ends is also an important consideration.
- Long-term rental: Typically, the vehicle is returned at the end of the contract. Purchase is possible, but terms are often unfavorable.
- Lease: It is easy to take over (purchase) the vehicle after the contract ends, and re-lease is also possible.
“If you have a strong sense of ownership, such as ”this car is mine,” or if you want to keep driving the same car after the contract ends, leasing may be a better option.
What is the best choice for me?
When long-term rental is advantageous
- Even if you have a low credit score, it is relatively easy to get approved.
- Perfect for those who don't want to worry about vehicle maintenance and insurance.
- This is beneficial for those who drive a lot or drive irregularly.
- Great for those who want to experience a new car every time.
When leasing is advantageous
- Suitable if you want to use a regular license plate.
- If you want to own the vehicle after the contract ends, leasing is advantageous.
- Great for those who want to save money by managing their own vehicles.
- If you plan to use the same car for the long term, leasing can be economical.
In closing
Both long-term rental and leasing have their pros and cons. The key is to choose the option that best suits your circumstances and priorities.
- If you want convenience and stability ➡️ Long-term rental
- If you value ownership and economy, ➡️ Lease
No matter which option you choose, it's important to carefully compare terms and conditions before signing a contract and check for any hidden costs. Make a smart choice and enjoy your car life!
