Should I Rent to Own a Car in Canada? All You Need to Know

You will often see adverts that want you to 'rent to own a car'. They will often be combined with ‘buy here pay here’ and other messages. But is rent-to-own a good idea? Does it make financial sense?

 

Our car loan team explains.

 

Rent to Own Cars

You will typically see rent to own adverts at dealerships or on billboards advertising dealerships. They are a legitimate way for people with less than perfect credit to finance a used car.

 

It works a little like this, you buy a used car from the dealership and pay a fixed monthly amount. Part of that amount goes towards paying a lease-type arrangement and part goes to paying off the car.

 

Over time, you’ll have paid the total amount for the car and it becomes yours. The lease-type part is no longer necessary and your payment stopped.

 

Those payments can be made weekly, every two weeks or monthly, depending on when you get paid.

 

Is Rent to Own a Good Idea?

Rent to own doesn’t usually make financial sense but there is usually no credit check involved so it can work for some people.

 

Rent-to-own arrangements will usually incur higher interest than a car loan and don’t usually come with much of a warranty. Used cars will typically have 3-6 months warranty only while you may be paying the ‘rent’ for much longer.

 

With the steady improvement in bad credit car loans and subprime lending, we don’t believe rent to own is a good idea.

 

Interest in these arrangements is usually high to offset the risk the dealership is taking. This can work out expensive over the term.

 

Alternatives to Rent-to-Own

In many situations, you would be far better off with a Dundas bad credit car loan. Interest could be lower, you could pay less over the term and all your payment goes towards the car and interest and not the ‘lease’.

 

Servicing a bad credit car loan can also help rebuild credit. That’s something rent-to-own does not do.

 

If it’s a credit situation making you consider rent to buy, a bad credit car loan would make more sense. You can still borrow with poor credit and you can use the loan to help rebuild that credit while you pay it.

 

If you tried applying for a bad credit car loan in Dundas and were refused, we can help. Our expert team assists hundreds of people in all kinds of situations, with all kinds of credit scores.

 

You can also save for a larger down payment or get a cosigner. Both could help boost your chances of being accepted for a loan.

 

Regardless of your situation, if you can afford to repay the loan, we can find you one. We’re pretty sure it will be much cheaper than rent to own too!

 

We will use all our skill and experience to deliver the lowest possible Dundas auto loan rates, guaranteed. Contact Car Nation Canada Direct to learn how we can help.

 

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