In the present life, owning a house, a car is a common need for everyone. Buying a car in one payment is much tougher for many middle-class families, as to maintain their daily needs, they can’t afford to do so. After seeing these problems, many companies saw their business ideas into it and started renting their car. In this situation, many countries started renting at different amounts of interest rates.
As it also works in the form of like if Harsh credit score is 720. After he decided to buy a car at $15000, he made a down payment of $1500. Harsh pays $100 every week, i.e., monthly $400, and he will own that car after 3 yrs 5 months of payments. That means the $16400 total amount need to pay. As the total need to be paid is $16400+$1500. So before owning a rental car, make sure of the terms and conditions.
What’s In It For You?
- No interest: This means you don’t have to pay any more amount of car if you pay at different terms.
- Little to no credit checks: Most companies do not often check the credit score for car loans.
- Repair and build your credit: Paying your bill on time will also increase your credit score.
- Fixed payment: You have to pay a fixed amount as per the terms.
What are The Cons?
- Cost: In some companies, the interest may be more, so the cost of a car may be increased at the end of the terms.
- More frequent repayments: You won’t be able to save earnings as the repayment time will come closer as you start saving.
- You don’t own a car: In some cases, if you have a crisis in your family, then you won’t be able to repayments then the car won’t be yours.
The most important major factor in this is that you still get auto loans if you have bad credit
. This means you don’t get a loan from the bank, but you get a loan from the loan aggregators. As some experts also create a joint application with other people to get the loans.
Let’s discuss the difference between rent to own vs. leased car. The most common difference is when you pay for the rent-to-own car option after a certain amount of time that car is named after yours, but whereas leasing a car you pay less, that car will be ours for a very short period. As in renting a car, the credit score is also not seen, whereas, in leasing, they often see credit score.
Rent-to-own car is a much efficient method for many middle-class families to own a car with less credit score and less interest. So for this type of car loan, many such companies provide car loans for families.