Rent-to-own car financing has become increasingly popular in South Africa for good reason. A tough economic climate, combined with credit-wary consumers, means that South Africans are looking at alternative ways to finance their cars and to avoid debt.
A brand-new car loses a great deal of value as soon as it is driven off the showroom floor. Some cars depreciate by as much as 20% within the first year and when financing a pre-owned vehicle, the loan is subjected to high interest rates that could increase in the future. This means that you are paying off even more interest than paying for the vehicle.
Buying a car can easily evolve into a continuous debt cycle. While many car repayment terms range from 60 to 72 months, car owners often trade their cars in after 46 months. This leads to negative equity because the first car has not yet been paid off.
A more financially sound way to buy a car is through a rent-to-own vehicle financing company such as Earn-a-Car. Your monthly car repayment will most likely be lower than the monthly instalment owed to a bank, especially if you have a low credit score. Earn-a-Car does not consider your credit history when approving your application for a rent-to-buy car.
With Earn-a-Car, you get:
- A fixed rental payment,
- No hidden costs,
- The possibility to terminate the rental agreement with a one month notice,
- A part of the monthly rental is cash, which may be paid back to you to spend as you like, if your account is up to date,
- An amount of your monthly rental is kept aside to assist you to service and maintain your vehicle,
- Accident cover,
- Vehicle Tracking,
- Comprehensive vehicle warranty cover to give you peace of mind, and
- Vehicle breakdown and 24 hour roadside assistance.