Blogs / 21 NOV 2022
International Vehicle Services: Buy, Lease, or Rent
An assignee (let’s call her Susan) is ready for her relocation journey. The home is sold, the new home has been found, the school has been chosen, and there is an air of excitement for this next chapter. Susan has one more decision to consider: how does she choose whether to buy, lease, or rent a vehicle in her assignment location? The quick answer is usually tied to the length of time that she will want or need the vehicle. Buying usually works best for terms over three years or for permanent one way moves, leasing for assignment durations of two to three years, and renting is suggested for short-term periods less than two years.
However, every assignee has a unique situation when it comes to their relocation, work assignment, and personal transportation needs. There are many parameters to consider when deciding which method of vehicle ownership works best for Susan and her family. Here we break down some of the advantages of each option as Susan makes her decision.
Buy (financing): Buying offers the ability to drive a vehicle of Susan’s choice, which is an important factor since it will be with her for a long while. Financing the vehicle involves taking out a loan with a financial institution to pay for it over time. There is no limit to the miles or the wear and tear, but the mileage and condition could affect the trade-in or resale value. At the end of the loan term, the vehicle is hers to keep. Purchasing also has the lowest total cost of ownership for long or permanent stays. Additionally, a major advantage is that financing a vehicle helps Susan build credit in the assignment location which may be helpful for long-term or permanent one way moves. Now let’s consider leasing.
Lease: Leasing offers Susan the ability to drive a vehicle of her choice within a specific period with lower monthly payments than financing. There is an upfront down payment required and Susan will be responsible to pay for the vehicles’ depreciation and interest charges during the lease term. At the end of the lease term, she will have the option to purchase the vehicle or return it and pay any overages for miles or excessive damage. Leasing a vehicle can also help Susan build a credit score in the assignment location.
Car lease companies like Cartus’ supplier partner, International AutoSource, can assist with negotiations with local or national dealerships on behalf of the assignee, and can also assist in obtaining low-rate auto insurance without a local driving record or credit history.
Rent: Renting provides the ultimate flexibility for Susan to meet changing work assignment schedules or to protect her against the risk of her assignment being cut short. It also offers the ability to get a car quickly for a short amount of time while getting settled during the transition period. A possible downside is that renting a vehicle, while giving a lot of flexibility, does not contribute to Susan’s ability to build credit.
When considering renting, Susan will have to bear in mind there is often a minimum age to rent a vehicle, e.g., 21 years old in the U.S. 25 in most other countries. There is also a “young driver fee” (amount varies by country) for those fully licensed drivers under the age requirement (18 to 21 in the U.S.; 21 to 25 internationally).
So which option will Susan go for? Typically, assignees like Susan will make a decision based on the assignment length, monthly budgets, and other personal preferences.
For further information on this or any other aspect of your international assignment, please contact your Cartus representative or email@example.com.