If you need to buy a car, but have severely damaged credit, you may consider a rent-to-own option. Acquiring one of these vehicles typically requires a down payment, but no credit check, so it's easy to qualify for a rent-to-own program. However, there are some drawbacks associated with renting to own, so just make sure that you’re aware of all the facts before signing a contract.

How Do Rent to Own Car Programs Work?

Renting to own a vehicle isn't leasing. Although it seems like a very similar concept, lease agreements always end with the lessee turning in the car to the leasing company. When you enter into a rent-to-own contract, it is understood that you will own the vehicle after the last payment is made.

Rent to Own Car Programs

  • Find a dealership that offers a rent-to-own program. A quick Google search will show you which options are available in your area. Or, you can call around to local dealerships and inquire about whether or not they provide rent-to-own opportunities.
  • Have everything that you're going to need. Most rent-to-own dealers will want you to provide a down payment, a valid driver's license, a utility bill to show that you have a stable residence, and recent paycheck stubs to confirm your regular income.
  • Select a vehicle that suits your needs. A salesperson will show you which cars qualify and assist you in selecting the one you like. When making your choice, try to think in terms of affordability. Rent-to-own convenience comes with a price, and you're going to end up paying more than the vehicle is worth, regardless of which model you choose, so try to stay away from higher price tags.
  • Sign your agreement with the dealer. You will probably be making payments once a week. If you decide that you don't like the car that you're paying for, most dealers will allow you to select another vehicle. If you discover that you really can't afford the car, you will most likely be allowed to turn the vehicle in, but you will forfeit any money that you've already paid towards your contract.

Potential Problems with Rent-to-Own

While buyers with very low credit scores can benefit from rent-to-own programs, certain aspects of it may inspire you to consider other options.

  • Your credit may not improve with your payments. Yes, it's true that your credit probably won't be checked when you rent-to-own a car, but the dealer may also not report your timely payments to the credit bureaus.
  • You may be driving an older car. Leased vehicles are typically new vehicles, but rent-to-own cars tend to be used models. This isn't necessarily a bad thing, but make sure that you inspect the vehicle thoroughly, the way you would when buying any previously owned car. And no matter what kind of car you end up with, it is important to have a comprehensive and affordable auto insurance policy.
  • You will be responsible for repairs. While most leasing agreements include service and repairs, rent-to-own cars usually come with no such incentives. So, leave room in your budget for vehicle maintenance costs if you decide to go with a rent-to-own option.
  • Rent-to-Own can be expensive. As previously mentioned, the convenience that is associated with a rent-to-own program will cost you extra money. While it's true that you will end up with a car that you own, this will be after you have paid far more for the vehicle than it is worth.

To sum up, renting to own can be a viable (if temporary) solution if incredibly compromised credit is preventing you from getting approved for loans that require credit checks. And if this is the right solution for you, right now, you should also be aware of the fact that rent-to-own home options are also available.

A Rent-to-Own Alternative

It is possible for bad credit car buyers to get affordable financing if they work with the right dealers. And the experts at Auto Credit Express can quickly connect you with a dealer in your area who can work with your situation.

Just fill out our fast and secure online application to get started today.