If you’re thinking about getting a car but you can’t afford to pay for it in full right now, you might have come across terms like rent-to-own and lease-to-own. We’ll help you understand the similarities and differences of each option so you can make an informed decision about which one could be right for you.

What is Rent-to-Own?

Rent-to-own is a flexible car ownership option that allows you to use the vehicle while you make weekly or monthly payments towards it. At the end of your contract, you get to have full ownership of the car.

Key Features and Benefits:

• A lower deposit is required.
• Option to own the car at the end
• Ideal for people with low credit scores who can’t qualify for a loan.

Rent-to-own is great if you need a car quickly and don’t have the time or credit score to go through long and complex loan applications. It’s also perfect if you’re not sure whether you want to keep the car forever, but want to have the option.

What is Lease-to-Own?

Lease-to-own is similar to rent-to-own, with the caveat that you will be obligated to buy the car at the end of your contractual period.

Key Features:

• Fixed-term lease of around 3-5 years.
• Often includes a large payment at the end to validate your ownership of the vehicle.
• The leasing provider might conduct more in-depth credit checks.
• Newer vehicles are often available for leasing.

Lease-to-own is a bit more formal and can resemble a car financing plan. It’s usually better for those who are certain they want to own the car eventually and can commit to seeing the contract through to the end.

How Are They Similar?

Both financing options help you get behind the wheel without needing a big lump sum of money. You can make smaller, manageable payments towards owning the vehicle at the end of the plan.

These options are great if:

• You don’t qualify for a car loan because you have a poor credit history, or you’ve just moved to Australia.
• You’re rebuilding your credit.
• You need to get a car fast.

Which Option Is Right for You?

Choose rent-to-own if:

• You need to be approved for car finance fast.
• You don’t have a good credit score or full-time employment.
• You’re not sure if you want to keep the car forever.
• You want the freedom to return the car without incurring penalties.

Rent-to-own is a great way to get on the road quickly without worrying that your credit score isn’t high enough or that you don’t have a large deposit. It gives you flexibility and a clear path to owning the vehicle if you want to.

Choose lease-to-own if:

• You know that you want to keep the car at the end of the plan.
• You’re comfortable with a longer-term agreement.
• You can handle a lump sum (balloon payment or residual payment) at the end of the plan.

Things to Consider When Renting or Leasing a Car

No matter which option you pick, here are some tips to keep in mind:

• Read the contract carefully. Understand what’s included, like insurance and maintenance, and whether you could be subject to penalties or repossession if you miss your payments. Make sure you understand your rent-to-own vehicle contract terms completely.
• Ask about total costs. Sometimes, rent-to-own or lease-to-own deals look affordable, but you could end up spending more than if you buy the car with your own money or a loan.
• Check your budget. Make sure you can afford the payments.
• Think about the future. If you want to keep the car for many years, owning it might be cheaper overall.

Rent-to-own and lease-to-own are both excellent and hassle-free options for getting a car you can rely on and one that will suit your needs, budget, and lifestyle.

At RentBuyIt, we can help you find the right car plan. Whether rent-to-own or lease-to-own is best for you depends on your financial situation, if you are sure you want full ownership of the vehicle, and what kind of payments work for you. We service customers across Australia, including Melbourne, Brisbane, Adelaide, and the Gold Coast.

If you’re ready to explore flexible car options, visit our website or contact us to see how we can help you get on the road sooner rather than later.