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Rent To Own Vehicle Sample

Small used car dealers offer lease-to-own programs to buyers with poor credit as an alternative to standard vehicle leases. Through a lease-to-own agreement, buyers make payments over 2 years until they own the vehicle, though one late payment can void the purchase. However, these programs present several risks as dealers may charge high fees, resell vehicles after repossession, and payments do not build credit.

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rachiel vasquez
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3K views2 pages

Rent To Own Vehicle Sample

Small used car dealers offer lease-to-own programs to buyers with poor credit as an alternative to standard vehicle leases. Through a lease-to-own agreement, buyers make payments over 2 years until they own the vehicle, though one late payment can void the purchase. However, these programs present several risks as dealers may charge high fees, resell vehicles after repossession, and payments do not build credit.

Uploaded by

rachiel vasquez
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Small used car sellers offer lease-to-own or rent-to-own programs to people who

cannot qualify to purchase cars from dealers that have tougher requirements for
credit history and employment. Lease-to-own agreements differ from the
standard vehicle lease agreements offered by automobile dealers. Standard lease
agreements require monthly rental payments to use a car that is owned by the
dealer and, if the agreement includes a purchase option, you may choose to buy
the car at the end of the lease period. The lease-to-own agreement requires you
to purchase the car or lose your investment.
Tip
With a lease-to-own program, individuals with less than perfect credit are given
a chance to make payments on a car until it is completely paid off. The dealer will
hold the title until the final payment is made.

Lease-to-Own Programs
Used car dealers market the lease-to-own offer to buyers with financial
challenges, such as those with bad credit or no credit. The dealer keeps the title
and owns the vehicle for the life of the agreement. Buyers are promised low
biweekly or monthly payments. The dealers require no down payment or a very
low down payment. Buyers do not pay finance charges, property taxes or fees
during the agreement period.

Lease-to-Own Agreements
Lease-to-own agreements require buyers to make lease payments over a two-
year period. After successful completion of the two-year lease period, the buyer
receives the vehicle title and is owner of the car. The lease agreement usually
includes strict requirements for on-time payments. One late payment can result
in cancellation of the purchase portion of the agreement and loss of the payments
you already have made.

Risks of Lease-to-Own
Lease-to-own dealers often describe their offer as a better deal for buyers than
the high finance rates charged by “buy-here-pay-here” used car lots, which also
target credit-challenged buyers. However, lease-to-own car dealers often also are
buy-here-pay-here lots and present many of the same dangers for consumers.
Both types of dealers use immobilizer devices to prevent you from driving the
car if your payment is late. The buyer must pay fees for towing and to turn off the
immobilizer device before retrieving the car. If your lease-to-own agreement is
canceled, the dealer might allow you to make another down payment and enter
into a new two-year agreement to buy the same car.

Risks of Overpayment
Buyers of rent-to-own vehicles usually overpay for the used vehicles they
purchase. Payments often are higher than advertised, and the fees can add up,
causing high default rates. Frequent repossessions allow dealers to resell cars
many times. These dealers do not report your payments to credit agencies, so the
purchase does nothing to improve your credit rating or establish credit.

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