The Pros and Cons of Long-Term Car Rentals

For businesses that are always on the move, it’s essential to streamline operations and look for ways and systems that can help the entire business be more flexible, productive, and cost-efficient. A part of this is managing transportation in whatever department or unit it’s needed. 

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For both big and small companies in the Philippines, long-term car rentals are the obvious and viable solution. However, not all of them may prefer this as the initial option due to the different notions that (1) it may not be dependable, (2) it may be too costly to the business, and (3) hard to maintain. We hope to enlighten every business through this blog that will explore the benefits and challenges that come with borrowing cars for business operations in the long term.

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Benefits:

1. It helps businesses save on costs, especially if they know they’re going to use the fleet for long.
   Renting a fleet versus buying your own can save substantial capital that the business can use in other efforts. 
2. Depending on the terms and conditions agreed upon, it is the business’ option to have the car rental company manage the fleet.
   Imagine having to manage a fleet of cars for your business. Renting can help you save space, can help make management more hassle-free if the car rental company handles everything–from registration to insurance, from maintenance to servicing. 
3. Businesses won’t have to worry about big depreciation concerns.
   Because the fleet is not purchased by the company, there’s less worry about the vehicles’ residual values when the time comes that they need to be disposed of.

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Challenges:

1. It’s definitely a long-term commitment that could cost more.
   Long-term car rentals are definitely not recommended for businesses that are uncertain of their transportation needs or for how long they need them. Depending on the arrangements, the cumulative cost may also be expensive, which is why businesses must carefully strategize and analyze their finances before pushing through with long-term car rental agreements.
2. Think about the accountability that comes with ownership vs rental.
   Generally, people who use items that are not theirs may not have the same sense of responsibility and accountability as they would for their own. So expect for more wear and tear on the vehicles, unless the business creates a proper system for care and maintenance within the company.
3. There’s limited customization that you can do with rented cars.

Depending on the arrangement with the car rental company, there’s less chances that companies can use the fleet for branding or marketing efforts.

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With proper planning and research, long-term car rentals can become very strategic for businesses that want to enhance their transportation efficiency and focus on core operations. But like with driving, it’s always to approach everything with caution.

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