If you need a car but don’t have the money or credit to buy one straightaway, rent-to-own might seem like a great option. But is it really the best choice for you? At RentBuyIt, we want to help you understand both the advantages and disadvantages of rent-to-own plans so you can make an informed decision.

What You Need to Know About Rent-to-Own Plans

Rent-to-own gives you the opportunity to make regular payments over a period of time to cover the cost of a vehicle that you’ll eventually own. Instead of paying one large amount upfront or applying for a traditional car loan, you make smaller payments over the course of the term.

Here’s how it works:

You choose a car from a rent-to-own provider and sign an agreement to rent the vehicle for around 1-5 years. During this time, you make regular payments that cover the use of the car, insurance, registration, and maintenance. Once you’ve made all the scheduled payments, you have the option to buy the car, often by paying a small final fee to facilitate the transfer over from the provider to yourself.

Rent-to-own is a good option for people who want the convenience of renting now and the long-term benefit of car ownership in the future. It’s ideal for people who:

• Can’t afford a large deposit.
• Have been unable to get approved for a loan.
• Need a car quickly for work, spending time with family and friends, and doing the weekly grocery shop.
• Can only pay for a vehicle in small, manageable instalments.

The Pros of Rent-to-Own Cars

1. Overall Financial Position, not just your Credit Score
One of the biggest advantages of rent-to-own is that it’s open to people who haven’t been able to build a good credit history. Traditional car loans often require good credit, but bad credit car finance through rent-to-own companies usually base their decision on your current situation.

2. Easy Approval
Approval is typically fast and straightforward. You just need to provide the details of your income and identity. This makes it a great option if you’ve been turned down by banks or lenders.

3. Flexible Payment Options
Payments are often made in weekly instalments, which can be easier to budget for than a large lump sum payment. Many plans are tailored to suit your income and financial situation.

4. Path to Ownership
Once you’ve made all the payments, the car is yours to keep. That can be more affordable than a traditional car loan in the long run, especially for older or used vehicles.

5. Included Costs
Some rent-to-own agreements may include registration, insurance, and servicing in the weekly payments. This makes budgeting simpler since many of the car-related costs are already taken care of.

The Cons of Rent-to-Own Cars

1. Higher Overall Cost
You might end up paying more than the car’s value by the end of the contract. That’s because interest and admin fees are usually built into the payment plan. A lot of our customers who have been on the programme have found that the benefits have outweighed this disadvantage, making it easier for them to work towards car ownership.

2. Limited Car Choice
Some Rent-to-own providers may only offer a small selection of vehicles. If you’re looking for a specific model or a car with specialist features, you may not find it.

3. Missed Payments Can Lead to Repossession
If you miss payments, the provider can take the car back, sometimes without warning. However, if you speak to the supplier of the vehicle as soon as you come into financial trouble, they will usually be more than happy to work with you to develop a solution that avoids repossession.

4. No Early Ownership
You don’t own the car until the very end. That means you can’t sell it or trade it in until it has been fully paid off.

5. Hidden Fees
It’s important to read the fine print. Some rent-to-own vehicle contracts may have extra fees, like late payment and administrative charges, or a final cost to transfer the vehicle into your name.

At RentBuyIt, we believe in giving Australians more flexible and affordable car ownership solutions. Rent-to-own is just one option, and for many of our clients across Melbourne, Brisbane, Adelaide, and the Gold Coast, it has been a life-changing way to get back on the road.

Don’t just take our word for it. Many of our customers have given us a five-star rating and glowing Google reviews like this:

“These guys are amazing, such a pleasure to deal with, and made the whole process transparent and easy. If you are looking at alternatives to traditional methods, I suggest you give these guys a try. Very happy customer.”

Get in touch with us if you have any questions about rent-to-own or to put in an application today.