The rise of Mid-Term Leasing in Latin America

New mobility models are emerging on the leasing market in Latin America. To cope with the higher required flexibility, more flexible, short-term and mid-term leasing models are entering the market. 

On the one hand, there is the trend for traditional leasing companies to offer shorter term leasing models in which contracts do not necessarily need to be a year or longer. On the other hand, companies which are not necessarily leasing companies are preparing to enter the market and provide this service. 

Leasing for ride-hailing

We wrote earlier on how Nissan Mexico offers a specific leasing scheme for ride-hailing drivers of Uber and Cabify. The leasing term is reduced to 12 to 48 months, instead of the usual 72, and requires lower downpayments. To maximise the flexibility, drivers could extend the agreement at the end of the contract, opt for buying, returning or even exchanging the car for another vehicle.

In Brazil, car rental and fleet management company Localiza developed similar services, one called Localiza FLEX and the other Localiza FAST. If you are looking to rent a car for less than two to three weeks, you can use Localiza FAST, which provides a rent-a-car service for about 90 reais per day. For your convenience, the car can be reserved and even unlocked via a smartphone application. 

If you want to use the car for a longer term, you can opt for the Localiza FLEX service which is offered for a minimum of one month and with progressive discounts for contracts of 2 to 6 months, with a limited mileage of 3,000km a month. However, special packages for high mileage drivers, such as ride hailing drivers, are available as well. The monthly fee includes all costs, such as insurance, maintenance, repairs and even vehicle taxes.

Leasing or renting

Other kinds of companies are offering similar services as well. Specifically in Brazil, the Brazilian insurance company Porto Seguro offers Carro Facil, which is like a short-term leasing contract with a one-year minimum and with a limited mileage of 12,000km per year. 

Moreover, talking about short-term leasing contracts, several car rental companies offer similar services known as mid-term or long-term renting. There is Avix Flex, offering corporate long-term rental contracts with the ease of leasing, but without its ties. Similar services are offered by Europcar and Sixt, though not exclusively in Latin America. 

In these cases, the services can be used both for Latin American based fleets and companies and for foreign companies with employees which are working on a project or a short-term contract in the area. In the end, the short-term leasing or long-term rental services can fill a gap in the changing mobility market of (1) the upcoming ride hailing companies, and (2) the increasing globalisation with employees being dispatched all over the globe for limited periods.