What Happens at the End of a Rent-to-Own Car Deal?
If you can't afford to buy a car outright or have problems getting credit, then a rent-to-own deal is a viable option. This works kind of like leasing; however, you contractually get to own the vehicle at the end of your contract as long as you make all your payments.
Not all rent-to-own companies work exactly the same way at the end of the deal, however. You have different options with different companies. What are they?
You Automatically Own the Car
Some rent-to-own companies simply hand over the car at the end of your contract. Your regular payments during the term of your deal cover all the ownership payments. So, it's yours when you're done.
Bear in mind that you may have other costs at this stage even if the company doesn't charge extra at the end of the agreement. The car belongs to the company until you transfer its ownership, and you may have to pay to do this.
You Make a Final Ownership Payment
Some companies factor in a final payment on top of your regular rental costs. You make this payment at the end of the deal to take formal ownership of the vehicle. In some cases, you may have to make a nominal payment to close down the contract. Some companies charge as little as $1 for this. Others ask for an extra monthly payment at this stage.
Some companies charge larger balloon payments before you own the car. This may be a fixed price or, in some cases, it may be the difference between the rental payments you've made and the market value of the vehicle at that time.
Finally, some companies allow you to make an offer at the end of your rental period to buy the car. This kind of contract is trickier to assess from a cost value; however, a reputable company will give you an idea of acceptable offers before you sign up.
It's a good idea to check on any residual payments you need to make at the end of a contract. It's better to know how much money you'll need at the end of the deal before you own the vehicle.
To find out more about how this car ownership option works and which type of contract would suit you, talk to some rent-to-own car companies in your city or nearby and ask them how their systems work.