Long-term leasing (LLD)
Multi-year vehicle rental for a payment that bundles services (maintenance, assistance), with no purchase option at the end of the contract.
Definition
Long-term leasing (LLD), location longue durée, is a contract under which a company rents a vehicle over several years, for a defined mileage, against a monthly payment that generally bundles services: maintenance, assistance, replacement vehicle, sometimes tyres and insurance. At the end of the term, the vehicle is returned to the lessor. LLD carries no purchase option, unlike LOA (location avec option d’achat, France’s lease-purchase formula).
In detail
It is precisely this absence of a purchase option that distinguishes the two formulas (service-public.gouv.fr): LOA provides a buy-back value allowing the lessee to become the owner, while LLD organises the return from the outset. For a fleet, LLD turns an investment into a usage expense: the company buys mobility, not assets.
On the accounting and tax side, lease payments are booked as expenses: the vehicle does not appear on the balance sheet and is not depreciated by the lessee. The deductibility of lease payments on passenger vehicles nonetheless remains capped under rules analogous to those governing depreciation in ownership (French tax doctrine BOFiP, BOI-BIC-AMT-20-40-50), and the lessor must disclose the non-deductible share.
The operational watch point is the return: exceeding the contractual mileage and reconditioning fees (scratches, wheels, interior) can significantly inflate the final cost. A jointly signed condition report and a wear-and-tear grid negotiated upfront limit disputes. These exit costs must feed into the TCO calculation, alongside the lease payments.
Finally, LLD paces fleet renewal: each contract end is an opportunity to reconsider the powertrain and accelerate fleet greening without carrying the residual-value risk of electric vehicles. The market’s lessors and platforms are compared in our overview of fleet management solutions and our analysis of fleet managers.
Frequently asked questions
What is the difference between LLD and LOA?
LOA includes a purchase option: at the end of the term, the lessee may acquire the vehicle for the buy-back value set in the contract. LLD provides none: the vehicle must be returned. In exchange, LLD bundles services more broadly (maintenance, assistance) and simplifies the management of a fleet that renews continuously.
Does LLD include maintenance?
Most often, yes: routine maintenance, assistance and a replacement vehicle are standard features of so-called full-service contracts. The exact scope remains contractual: tyres, insurance or claims management are options. Payments should be compared on an equivalent service scope.
Related terms
- TCO (total cost of ownership), the calculation that decides between purchase, LOA and LLD
- Fleet management, the function that steers contracts, returns and renewals
- Fleet greening, the obligation LLD helps meet renewal after renewal
