Renting a car offers benefits for car buyers who have trouble with their credit history, but does renting a car actually save money? Rent-to-own financing offers the same benefits as leasing, with the added advantage that you own the car at the end of the lease period. If your main reason for pursuing this path towards car ownership is to save money, you should be armed with all the facts, and find out whether you will make any savings on a month-to-month basis.
Qualifying for rent-to-own financing
Qualifying for rent-to-own financing is far more straightforward than the usual hire-purchase agreements that come with car financing from financial institutions. There are no credit checks, and your application can be done online – with immediate approval. This is one of the primary benefits of renting to own. Upon qualifying, you commit to paying a monthly installment over a fixed period, after which the car becomes yours. Unlike with conventional financing, no interest is charged, which means that your installments will be lower by comparison.
Less financial commitment
A rent-to-own agreement comes with less financial commitment than conventional vehicle finance agreements. With a car loan, you are liable for the full amount of the loan, as well as interest, regardless of what happens to your financial circumstances. If you are unable to make payments, the car will eventually be repossessed. If it is sold, you will still be liable for any shortfall. With a rental, on the other hand, if you cannot afford to make payments, you simply return the car without any further obligation.
Deals come with car insurance
When you buy a car on a financing agreement from a bank, you are required to get an insurance policy to cover the vehicle. The monthly premiums become an additional expense for you. With rental agreements, the cars are already insured and the cost of insurance is included in the monthly installments, so there are no additional costs for you.
On the whole, renting to own a car still comes with monthly payments to which you have to commit. However, the absence of interest, as well as of extra costs, such as insurance, means that you will save on a month-to-month basis, compared to purchasing a car of similar value through conventional financing.
Earn-a-Car offers pre-owned vehicles in top condition, with manageable monthly payments. With our rent-to-buy car finance option, you have the opportunity to get behind the wheel of a car you will eventually own! Instead of considering buying a new vehicle, come to Earn-a-Car for a rent-to-own option. To find out more about how renting a car can save money, contact us today.