How Rent-To-Own Cars Work

If your credit history is bad or non-existent, buying a car can be a complicated venture. Your options are usually minimal. It's either you fork cash out of your pocket to purchase the vehicle (which can be challenging), or you visit a buy-here-pay-here car lot to access their car loans that come at 20% interest. Mind you; you'll need to commit to a large down payment and sales tax. 

However, you also can explore rent-to-own car options. With this facility, you can get a car only by making a down payment and paying weekly or monthly payments. Once you get to the end of your payment term, the vehicle becomes yours. Some drivers tend to compare it with auto leasing. Here's the difference between auto leasing and rent-to-own cars. 

How is Rent-to-Own Different from Auto Leasing?

The most apparent difference between these two car buying methods is that the car is returned to the auto dealership at the end of your car leasing term. When you purchase a rent-to-own car, your weekly payments are deducted from the vehicle's cost, and at the end of the payment term, you take complete ownership of the car. Depreciation isn't factored in with rent-to-own payments. You also need to confirm if there are any hidden fees or if the full charge is applied to the vehicle's cost.

Some other critical differences are:

• With rent-to-own cars, you'll need to make a down payment comparable to a new car financing, while an auto leasing process will not require a down payment. 
• You can get new cars with auto leasing while you usually get used models on rent-to-own packages, which is why you should inspect a vehicle you are buying via a rent-to-own process. 
• Leased cars also come with maintenance and repair bundles. 

How Does the Rent-to-Own Process Work? 

Here's how the process of getting a car via the rent-to-own model:

#1. Source from a reputable dealer: To begin the process, you need to find a credible dealership or an online provider. Ensure your preferred partner offers an excellent customer experience and a great selection of well-run vehicles. Check for the customer reviews to gauge if previous customers are satisfied with the service level they received from the dealership. You can also ask people around you for recommendations. 

#2. Get your application approved: With the rent-to-own process, you don't need to worry about your credit score. All the dealership will check for is your household income and employment history. Once the application is approved, you can go to the next step of the process. 

#3. Select your car: This is the best part. The options you have will depend on the dealer you'll be working it. It's, however, improbable that you'll get newer models of your choice of cars. Research thoroughly for car options, and make sure you pick a quality vehicle that's worth the investment. Also, check your budget to ensure you can afford your down payments and weekly or monthly payments. 

#4. Make your down payment: Before you head off with your car, you'll have to give the dealer a down payment. Your initial payment depends on the vehicle you pick. Once you drive off with the vehicle, you'll begin making the weekly or monthly rent payments for a fixed period. It's usually 24 – 36 months. You should also ensure you don't miss a payment as you'll pay the penalty for defaulting on your payment dates. 

Final Thoughts

Once you are done with this process, it's time to take your car and head off on your journey. Just ensure you make all your weekly or monthly payments as at when due.