All You Need to Know About Rent-to-Own Cars

Have you heard about rent-to-own cars? It is a form of car ownership where you rent a vehicle for a specified period. Your weekly payments act as instalments on the vehicle's purchase price. At the end of the rental period, you will own the car. Below is a comprehensive guide on rent-to-own cars.

How Does Rent-to-Own Work? 

Rent-to-own plans are car ownership arrangements designed for people with poor credit ratings who cannot secure bank finance to purchase a vehicle. The car dealership does not need to conduct a credit check. Besides, they will not charge interest. A person interested in a rent-to-own vehicle is required to make an initial deposit. A portion of the weekly payments goes towards buying the car while the other part covers rental costs.

Rent-to-own cars are a bit more expensive than bank finance cars. Therefore, you have to conduct a thorough assessment to determine if the arrangement suits your current situation. Most companies will charge a penalty for late repayments. As such, you must be confident that you can afford the weekly payments.

Top Tips When Considering Rent-to-Own Arrangements

Below is a guide on how to make the most out of a rent-to-own arrangement.

1. Negotiate the Buying Price

Most dealerships will allow you to negotiate the purchase price and repayment terms. As a rule, the weekly payment should not put too much strain on your pocket. If it does, ask for an extended repayment period. If your financial situation improves, make lump sum payments to ensure you are ahead of your payment schedule.

2. Inspect the Vehicle

Rent-to-own plans are mostly available for used cars. As such, you must inspect the vehicle to ascertain its mechanical condition. Besides, you could ask for a pre-purchase inspection report from a reputable garage. Conduct some internet research to know what problems the car might develop. Rent-to-own cars do not have a warranty. Owners cater for repairs and maintenance costs.

3. Check the Terms of Contract

Read the contract to understand the terms and conditions of the arrangement. For instance, will you get a refund if you can no longer make the weekly payments? Check extra costs, such as the cost of transferring the vehicle to your name.

Rent-to-own cars are an ideal choice for people with a bad credit rating. People considering rent-to-own cars should negotiate the buying price, inspect the vehicle and check the terms of the contract. 

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