For most individuals, a car is an expensive investment. So, they opt to finance their car through loans or rent them on a temporary basis. But, besides these options, alternatives like rent-to-own arrangements help buyers avoid making significant upfront payments or returning the vehicle after the rental period ends. Here, a portion of the rent payments go towards the automobile’s price, benefitting buyers with budget constraints that prevent them from immediately owning a car.

Ways to buy cars through a rent-to-own arrangement
The basic idea behind rent-to-own cars is that instead of directly purchasing a car, one can first lease it for a predetermined period of time, during which one can get to know the condition and feel before committing to the purchase. During this time, a part of the rent one will pay will add up toward the final purchase price of the car. So, at the end of the lease term, one can pay the remaining amount of the car to claim its ownership. One must note that the only way to get a rent-to-own car is to approach a dealership that offers one. It is also important to note that dealerships only offer rent-to-own agreements on old and used automobiles. Despite that, there are several advantages to choosing rent-to-own cars.

Advantages of rent-to-own cars

No credit checks required
One of the major benefits of choosing a rent-to-own car is that one does not have to provide a credit check to prove one’s eligibility. So, this purchasing option can benefit individuals with a low credit score and poor credit history, which makes them ineligible for other traditional financing options. But, one might still be required to have a regular source of income and provide proof of the same to qualify for rent-to-own car agreements.

Also, individuals who need to improve their credit score can request the dealer to report the payment history of their rental payments. If one makes all these rental payments on time, reporting the payment history will positively impact their credit score. But before making this request, one must consider all the payment terms to ensure they do not miss out on any payment.

Ownership of the vehicle
Another advantage of rent-to-own car agreements is that one can own the vehicle at the end of the term. Of course, claiming ownership of the vehicle is not mandatory in this agreement, but having this flexible alternative to owning the vehicle can provide some peace of mind. Also, one must ensure they meet all the requirements of the agreement to guarantee the ownership of the car. Furthermore, it is important to note that the automobile cannot be sold to another party until the end of the rental period.

No interest on payments
Unlike traditional financing options, one does not pay any interest in the payments made in a rent-to-own car agreement. But, one still pays a rental fee, which is separate and will go to the dealer. So, the payments that one makes include the price of the car and the rental fee.

Tips for choosing rent-to-own cars
Opting for a rent-to-own car comes with many advantages. But, it is important to consider several key factors to ensure one makes the right decision.

Check the car’s condition
Since most dealers offer old and pre-owned automobiles as part of a rent-to-own arrangement, one should check the car’s condition before committing. One can start by examining the car’s exterior condition and then carefully inspect its interiors. One must also check the mechanical condition of the car to ensure that it functions well. One must also note that when it comes to used cars, their mileage tends to be low. With ever-increasing fuel prices, this might impact one’s finances in the long run. So, one must check the mileage of one’s chosen automobile before finalizing it.

Consider the payment cycle
Unlike traditional financing options, rent-to-own car agreements do not have monthly payment cycles. Instead, they come with either weekly or bi-weekly payments. With such frequent payments and such small gaps between due dates, it can be easier to miss out on a payment installment or two. And if one misses out on a payment, one may have to pay a late fee. So, one should consider this factor and review the late payment fees before signing the agreement.

Compare different dealers
When considering getting a rent-to-own car, one should visit multiple dealerships that offer this arrangement. While visiting, one should check the cars offered by different dealerships, their rental amounts, and the terms of the rental agreements. This will allow one to check which dealership offers good terms, low rental prices, and good car models, including electric cars. It is important to note that rent-to-own cars often come at a higher price than used cars brought through traditional financing options. So, one must also consider the car’s final price when choosing a dealership and a model.

That’s not all. One must also check the payment breakdown in the rental agreements of different dealerships. The payments that one makes in a rent-to-own car agreement include a fraction of the final price of the car and the rental fees. So, checking the payment breakdown will allow one to determine which dealership charges higher rental fees.

Check the terms on early termination
If one realizes they no longer wish to own the car during the rental period, they can terminate the agreement early on. But, early termination sometimes involves certain fees, which are usually the deposit made for the car. So, before finalizing the agreement, one must consider this factor as well.