Online car rental: what you need to know

Renting online is not that different from renting at a local dealer’s office. You will end up in much the same place as an in-person agreement regarding terms and monthly payments. Even online, you can still take advantage of leasing offers that the manufacturer may sponsor.

Read on for some tips on online car rental and what to expect.

Why rent a car online?

If you approach the task of getting a new car correctly, you will do most, if not all, of the pre-purchase research online. Why not take the next step and complete the entire transaction online?

Many of us have honed our online shopping skills well beyond just research during the pandemic shutdowns. If you’re willing to forego the test drive (which isn’t a very good idea), you’ll never need to walk into the dealership until you’ve picked up the vehicle. Many dealerships will deliver your new car to your doorstep. Some dealerships will even bring a car to your home or workplace for a test drive.

Renting or buying cars online eliminates most of the stress and frustration often associated with the car buying experience. Things move at your pace rather than the dealer’s pace. You can pause to reflect on the process, absorb the information, and move on to the next step when you’re ready.

Plus, you can juggle deals from multiple dealerships simultaneously without ever leaving your chair.

Once you’ve chosen the vehicle, look for a tab that will take you to financing options or “calculate your monthly payment”. Choose “Leasing” and refine the numbers. Many new car dealerships offer special lease deals usually sponsored by the manufacturer. You must lease through the dealership to take advantage of these offers, but you can also provide your lease to a third party.

Do the math

Monthly lease payments are usually lower than loan payments when financing a car. However, you should check the calculations for your situation. Use our car payment calculator to help you determine monthly finance costs. Most new car dealerships offer lease deals on virtually every model. They post details, upfront costs, and monthly payments on their website. Make sure the math works for your budget.

Also, check the insurance coverage required by the leasing company. Minimum insurance requirements for leases are often higher than when financing an auto loan. You should also consider guaranteed asset protection, commonly referred to as GAP insurance. This type of insurance product covers any balance you may have if your car is stolen or written off as a total loss after an accident. Although your all-risk auto insurance only covers the current book value of your vehicle, it does not cover the outstanding balance of your finance. GAP insurance saves you from paying the difference.

Create a Dealer Relationship

It is possible to follow the entire purchase and financing process online without voice contact. Many of us buy things online every week, bypassing any human interaction. However, you will probably have a question or two when acquiring a new vehicle. Establishing personal contact at the dealership makes sense.

Many dealerships have at least one team member who specializes in online shopping and financing. You can find out who this person is by calling, chatting, or emailing the dealership. Contact the sales manager if the dealership does not have a dedicated online specialist. Let the manager know that you are shopping, buying and financing online, and ask for contact information for a qualified person to help you with any questions.

Carefully review every detail

Since you are not going to the dealership, you will have to be more careful and check everything. Just because a car is on the dealer’s website doesn’t mean it’s current inventory. The dealer may have sold it the day before or it could arrive next week by transport truck.

Whichever model you choose, ask your contact person to email you the vehicle identification number (VIN) of the car. The VIN is a 17-character identifier (consisting of capital letters and numbers) unique to that vehicle. It appears in several places around the car, but the most accessible site is a plaque on the dashboard at the bottom of the driver’s side windshield.

In addition to the VIN, ask for a copy of the Monroney sticker, the window sticker displayed on every new car. It contains a list of the main standard features, base price, destination charges, options and their costs, and a total suggested retail price. It also displays the VIN. Your dealer contact can scan the Monroney and email it to you.

Obtain a written rental offer

Two laptop hands trade a car for money

Also ask the dealership to present their offer in writing via email. The offer must include:

  • The transaction cost of the car with all fees
  • The terms of the lease with all initial fees
  • The monetary factor of the lease

The monetary factor is the lease-speak for the annual percentage rate (APR), which acts as an interest rate for the vehicle. This can be displayed in two ways, such as .002 or 2.0. If you want to know the equivalent interest rate, multiply 0.002 by 2,400 or 2.0 by 2.4. Either way, the similar APR in this example is 4.8%. Knowing the money factor helps when cross buying for a lease.

When signing the documents, make sure that all figures in the purchase agreement and lease match the written offer. You should also triple check that the VIN on the paperwork matches that of the offer and Monroney.

Request the lease

You will need to rent through the dealership to obtain any lease offered by a manufacturer. However, you are free to shop around for a better rental deal. Online leasing brokers, banks and other lenders offer car rental contracts.

Leasing is more involved than loan financing. Comparing car rentals includes more than just the monthly payment. Before making a rental decision, always get a list of all upfront costs, deposits, fees, and money factor.

Another term unique to leasing is “capitalized cost reduction,” which is any amount that reduces the final amount used to calculate lease payments. A down payment or trade-in are examples of capitalized cost reductions. To evaluate a lease offer, you need to know the amount of capitalized cost reduction.

Fill out the paperwork

If you don’t want to go to the dealership or other leasing entity to complete the paperwork, the dealership or leasing company can send someone to you. Or, the dealership could do it overnight with courier service rather than sending someone to you with the paperwork. Establish how and who will handle the paperwork early on in conversations, emails, or discussions with the landlord.

We recommend returning the documents in person if the dealership is local or easily accessible by car. This allows you to monitor the vehicle if you haven’t already. You can check the VIN and so on before handing over the documents. Be sure to call ahead to make an appointment to view the car and finalize the paperwork if you choose to go in person.

Get the car up to you

Delivery is another aspect of buying that you need to clarify early in the buying process. If the dealership is local, they may have a procedure to deliver the car to your home or workplace. You can also choose to pick it up yourself at your convenience. If the dealership is not local, you will need to arrange a transport service to pick it up and deliver it to you. Your dealer’s contact person can probably help you arrange long distance delivery, if needed.

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