What Is a Long-Term Car Rental and When Does It Make Sense?

Long-term car rentals are easy to find but can be expensive, while a short-term car lease can be a better fit if you can find the right one.

Steven Lang | 

Aug 7, 2023 | 3 min read

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If your daily driver is in the shop for lengthy repairs or if you're in a place where you can't take your car, you might consider renting a car. If you need a vehicle for two years or less, a long-term rental or a short-term lease could work for you. Each option has its pros and cons.

What Is a Long-Term Car Rental?

A long-term rental is just that, a car rental that lasts for several weeks, months, or even years. These rentals differ from a short-term lease in a number of important ways.

You typically will pay more per day for a long-term rental than you would for a leased car, but insurance, roadside assistance, and a generous mileage allowance (anywhere from 100 miles per day to unlimited miles) are all available through that rental agreement. Leases rarely have these options. If you shop around, you should also be able to get a lower rate if you rent long-term than you'd get from renting daily.

Depending on why you're without a car, your long-term rental might even be free. Insurance policies often include rental reimbursement when your vehicle has been in an accident.

Unlike with a lease, you won't have to go through a credit check to rent a car for a longer period. Just put down a credit card, sign, and go. This can be beneficial if your credit is less than stellar. With that rental, you'll also have flexibility. While the rental agency might offer fewer models for long-term rent, you'll usually be able to swap cars during your term if you choose to.

If you have solid credit, won't get reimbursed, and need a car for longer than a few months, a short-term lease might be a better option for you.

Short-Term Leases Are Cheaper but Tough to Find

Dealerships and leasing companies sometimes offer leases that last 24 months or less. They're sometimes cheaper overall than a long-term rental, and in many cases the mileage allowance (usually 12,000-15,000 miles per year) will be enough to get you by.

The bad news is that short-term leases can be hard to find. Many companies don't offer them at all, and those that do usually don't advertise them, so you'll have to inquire. You'll also have to undergo a credit check when you lease, and your credit rating can affect your monthly payment. Bad credit could disqualify you altogether.

Due to their limited duration, short-term leases carry significantly higher monthly payments than typical three- or five-year leases, in part because the car company will be spreading the cost of the car's depreciation over a shorter period. According to Experian, a new car loses 20% of its value on average in its first year.

If you can't afford a new-car lease, you might need to think used. Sites such as Swapalease and Leasetrader provide the option to assume someone else's lease.

Choosing Between a Short-Term Lease and a Long-Term Rental

• You have poor credit.
• You need to drive a car a lot.
• You want flexibility. While a lease locks you into a specific car for a set time, rentals allow you to swap your car and change the length of your agreement.

A short-term lease may be better when:

• You know exactly how long you need the vehicle and that period is longer than a few months but less than two years.
• You have good credit.
• You're comfortable with math and legal contracts. Look beyond the monthly payment for potential additional costs, such as mileage and condition penalties. If you're assuming someone else's lease, also be sure to get the car inspected.

Steven Lang

Steven Lang is a special contributor to Capital One with nearly two decades of experience as an auto auctioneer, car dealer, and part owner of an auto auction. Some of the best-known auto publications turn to him for his expert insight. He is also the co-developer of the Long-Term Quality Index, a survey of vehicle reliability featuring over two million vehicles that have been inspected by professional mechanics.