Rent-to-own car finance is becoming increasingly popular both across the globe and in South Africa. If you are looking for easy vehicle finance, then you need to seriously consider a rent-to-own option. Here are a few pros and cons you need to know:
- No Loans from a Bank:
Traditional vehicle finance from a bank is linked to the country’s interest rate. If the interest rate increases, so too do your monthly repayments. Banks generally charge much higher interest rates for car loans than for most other loans, especially if compared to home loans. With a rent-to-own car finance option, you will be paying a fixed, interest-free payment each month for the duration of your contract.
- No Lengthy Approval Process:
A poor credit profile can limit your chances of getting a car loan from a bank. With rent-to-own car financing, the only factors that are considered are whether you can afford the monthly installment and the upfront admin fee.
- Access to high-quality Pre-owned Cars:
At Earn-a-Car, all our vehicles are thoroughly checked by qualified mechanics.
You’ll get to own your car at the end of the rental period with a nominal buy-out fee, factoring in the upfront administration fee that you paid at the beginning of the contract period, making it a cost-effective option for most people.
With rent-to-buy vehicle financing, you can terminate your contract at any time by giving one calendar month written notice.
- Personal Finance Review:
If banks or other traditional financial institutions don’t approve your car loan application, it may be because the purchase of the car would leave you with too little monthly disposable income. Carefully consider your monthly expenses and overall budget to make sure you can, in fact, afford the monthly car repayments.
- Risk of Repossession:
Similar to the terms and conditions of a bank, your car will be repossessed if you do not pay the monthly installments.
- Capped Mileage:
Some rent-to-own car companies cap the amount of mileage you may travel. So, if you want to use the car for business purposes then you need to ensure the monthly distance you travel is factored in, in your lease agreement.
Want to find out more about rent-to-own vehicle financing? Then get in touch with Earn-a-Car today.