Comparing New Car Leasing to Lease to Own FinancingBoth new car leasing and lease to own financing may have the word lease in them but they are meant for different types of buyers and are unlike each other

Problem Credit Loan Questions

Here at Auto Credit Express we receive questions from credit-challenged consumers every day regarding the bad credit car loan process. Many of these questions have to do with the confusion between lease to own cars and new car leasing.

New Car Leasing Versus Lease to Own Financing

Here are some of the major differences between new car leasing and lease to own financing:

Vehicle ownership: When you lease a new car the leasing company owns the vehicle, not you. Once the lease is completed, the vehicle is returned to the leasing company. With lease to own financing, a portion of the payment goes toward vehicle ownership. Depending on how the finance contract is worded, once the lease term is completed typically the buyer either has to make a preset balance payment or already owns the vehicle outright.

Credit checks: New car leasing always requires a credit check, payments are reported to the credit bureaus, and these leases are typically only offered to buyers with good to excellent credit scores. Lease to own financing usually doesn't require a credit check and payments on these loans are not always reported to the credit bureaus.

Down payments: Most new car leases don't require a down payment, while lease to own financing programs typically require fairly large down payments.

Types of leased vehicles: While new car leases will always finance a new vehicle, lease to own vehicles are usually used cars since most of these dealers aren't franchised new car dealers.

Vehicle maintenance: New cars that are leased are covered by manufacturer-backed new car warranties that cover most vehicle systems. In most cases, lease to own vehicles are not covered by any warranty - if they are, the coverage is usually very limited.

The Bottom Line

While new car leasing and lease to own car financing may sound very similar, there are major differences between them including potential vehicle ownership, credit checks, down payments, the types of vehicles involved as well as maintenance costs.

Something else that's good to know: At Auto Credit Express we match people that have experienced credit difficulties with new car dealers that can offer them their best opportunities for approved auto loans.

So if you're ready to reestablish your car credit, you can begin now by filling out our online car loan application.