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walk around rental

What is a Walk Around Lease?

A driverless car rental is a car rental that allows the lessee to return the car at the end of the lease period without any financial obligation based on the car’s remaining value.

Learn about walking around rentals

A walk-through lease is a common type of car lease that relieves the lessee of any financial obligations at the end of the lease, assuming the lessee has met the maintenance and mileage requirements of the lease agreement. The lessee pays an initial down payment and monthly lease payments for the life of the agreement. They must maintain the car regularly and are penalized if they exceed the agreed monthly mileage cap. At the end of the lease, the car will be returned to the lessor, who will then sell the car to restore its residual value. The lessee can then enter into a new lease for the second car, often getting a good deal if they stay with the same rental company.

The pros and cons of walking around leasing

The advantages of a walk-up lease compared to buying a new car with a loan are the convenience and short-term cost savings of leasing. The lessee never has to sell the car, so there is no need to worry about repairs and resale value. Basic maintenance is required, but lenders usually offer service plans. Because the lender is still the owner of the car and will recoup the residual value at the end of the lease, monthly lease payments tend to be lower than loan payments for comparable vehicles. For some drivers, the appeal of renting a new car for a few years, then leaving and replacing it with another leased new car trumps other concerns about leasing.

From a purely financial standpoint, though, most experts agree that walk-through rentals are generally a poor choice. At the end of the lease, the driver has no equity in the car. The initial down payment and monthly payments cannot be recovered unless the lessee agrees to buy the car for residual value and then sell it. There may be hidden or unexpected costs. First, the driver is usually responsible for maintenance beyond the normal wear and tear of the vehicle. Second, drivers who exceed the monthly mileage cap will be subject to mile-by-mile fines.

For some drivers, other types of rentals may make more sense. Open leases generally have few restrictions on driving, but when the lessee decides to terminate the agreement, there are some additional risks involved with unknown residual value. One-time payment leases require an upfront payment and usually result in better interest rates.

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