Many American consumers who find themselves faced with tough economic situations are turning to car rental as an alternative to vehicle ownership. For those who aren’t able to come up with the monetary minimum required for a vehicle’s down payment or monthly amount of a car loan, renting a vehicle is a much more economically viable option.
Obstacles to Car Ownership
An unprecedented percentage of Americans have been impacted by the current economy by job loss or wage reduction, and many households don’t have sufficient monthly income to afford a car payment. At the same time, repossession of family vehicles has hit an all-time high in recent years.
Families already suffering from unemployment and reduced income have found themselves unable to keep up with their car payments, and then find themselves without a car altogether. In an unfortunate catch twenty-two, a family who has just suffered a repossession of their vehicle will be hit at the same time with a negative impact to their credit score, which makes it even more difficult to secure any loan which might enable them to procure another car.
Needless to say, lack of transportation can pose an insurmountable obstacle in the process of seeking and obtaining new employment. This is particularly true for the majority of Americans who don’t live in cities with robust public transportation systems. Without the ability to purchase a car, the prospect of car rental may supply the alternative answer, which helps a family get back on its feet financially.
Car Rental May be the Solution
For a family that finds itself without a vehicle, and without the financial resources to purchase one, the possibility of renting a car with a long term contract may provide the best solution. From a strictly financial standpoint, a monthly rental contract comes with a considerably lower price tag than a monthly payment on a loan to purchase a comparable car. Paying the cost of rental is much more easily accomplished than the prospect of keeping up with payments toward a loan for purchase.
For the financially strapped household, an additional advantage of renting is the fact that a damaged credit score does not preclude the possibility of renting. A consumer whose bad credit would result in a flat-out refusal of loan applications can still easily qualify to rent a car.
Avoiding ownership comes with additional benefits as well. The responsibility for auto maintenance—or repair, if any mishap should occur—will be the responsibility of the car rental agency rather than the user. Renting provides flexibility in terms of the type of car being used, and the renter can even switch to an entirely different model of car from one month to the next if the family’s needs or plans change over time.
Many agencies offer deep discounts for long term rentals, and it is often possible to rent used cars for even cheaper. The agency keeps its newer cars for premium prices, but the older cars are often still in service as well, for a much lower price. All in all, a car rental may be the perfect solution for a household’s transportation needs.
John is passionate about automobiles and automobile technology, and writes for Hertz rent2buy providing first time used car buyers in France with simple tips to ensure a good purchase.