Understanding the Difference Between Car Leasing and Car Rental

Though a car rental and car lease agreement share some similarities, they are quite different. For one, a car lease agreement is for clients who rent cars for a more extended period. It is for someone who prefers to save money by renting his preferred vehicle for a fraction of its buying price. However, you may also choose to buy the car at the end of the lease (which is not an option of a rental agreement). For a car rental agreement, you only use the car for a couple of months, so there’s less commitment involved. Here’s more information on the differences when you rent a car in Dubai and when you lease a car.

Car Leasing

The Duration of The Contract

As mentioned above, a car lease is a long-term contractual agreement, while car rental is a short-term agreement. A car lease can last for years, while the rental agreement usually lasts for a couple of days or weeks. Most of the people who lease vehicles require it for their daily activities. They want to “own” a car without really having to worry about costs associated with the actual owning of a car. People who rent vehicles wish for something to ease their stay; maybe they’re on vacation or a business trip.

The Payments

The way payments are made also differs. A rental agreement entails making a one-off payment for you to be allowed to use the vehicle for the preferred duration. For a lease, the full amount is calculated, and you first have to pay the initial cost and then specific monthly rates. The initial cost is a lump sum amount that you spend so that you are allowed to use the car. Subtract the amount from the predetermined lease amount, and you end up paying fewer monthly rates.


It’s against the law to drive a car without insurance. And for a leased car, you are responsible for your own insurance cost. However, the leasing agency will always give you an offer for an insurance package, meaning you have to pay more monthly premiums. For a rental, the company offers cars with insurance. It’s more convenient since it’s a short-term lease, and vehicles can be rented by foreigners who have no idea how to get insurance in Dubai.

Potential of Owning the Car

The Potential of Owning the Car

Yes, you can own the car you lease after the expiry. But you can’t do the same after the duration of the rental is over. For a lease, you can tell the company about it beforehand. What happens is the monthly payments now become a type of premium you pay to cover the cost of buying the car. At the end of the leasing period, we transfer the vehicle into your name.

What Is the Purpose?

Leasing and especially cheap car leasing in Dubai are meant to help the lease drive their chosen car for a prolonged period without necessarily owning it. So you’ve saved all the stresses that car owners have, like having to maintain or repair the vehicle, and your only expense is fuel. To rent a car means you want to have a convenient means of transport for a short period. Now you decide, do you want to lease or rent?