Rent to own car lots are another type of in-house financing dealership that offers no credit check auto loans. This makes them an option to get a car loan if you’re dealing with bad credit or no credit. Because rent to own dealers finance their vehicles in-house, they usually have different requirements to get approved than special finance dealerships. Rent to own car purchases can seem appealing! It gives you a chance to somewhat test-drive the car you’ll be purchasing in the future. And, you’re likely going to be in a fairly newer and more reliable car due to the nature of rental companies typical standards. Just remember, though, these cars have wear and tear due to their use! It’s highly advised you do your research and understand how rent to own car lots deal and work with consumers that have poor credit.
Understanding Rent to Own Car Purchases
Rent to own car purchases work similarly to the auto loans offered by other in-house financing dealers, like buy here pay here dealerships. You take out a loan directly with the dealer you’re buying the vehicle from, and you agree to make payments for a fixed term and then own the car outright at the end. These loans are designed for people who need a vehicle but are facing credit issues. These dealerships typically don’t run credit checks. So, they won’t care if you have bad credit, negative information on your credit reports, or no credit altogether. If you want to get a car quickly with no credit check, a rent to own dealer may be right for you. Learn about rent to own dealers from https://www.investopedia.com/articles/personal-finance/082315/renttoown-car-how-it-works.asp.
Rent to Own Car Loan Requirements
What do rent to own dealerships require to get approved? Instead of basing approval on your credit score and history, they use your income to qualify you. The specifics vary, but rent to own dealers generally require a minimum monthly income of $1,500 to $2,000 before taxes. It can be from one or more jobs, or even sources of unearned income like Social Security or disability.
These dealerships aren’t concerned about where your income comes from like special finance dealers are. However, these dealerships usually do require proof of income. This is to ensure, for lenders, that you’ll be able to pay back the auto loan. You should bring in a copy of a recent computer-generated pay stub showing your year-to-date earnings if you’re a W-2 employee, two years of recent tax returns if you’re self-employed, or documents that prove your unearned income if you have it, such as an award letter if you’re on disability.
Rent to Own Car Purchases Require a Down Payments
Rent to own dealers also typically require a down payment in order to approve you. Bad credit lenders generally require a minimum down payment of $1,000! Or, 10% of the vehicle’s selling price! But, this can vary more widely at rent to own dealerships. The required amount of money down is usually based on the car you choose, and it may be higher than what other bad credit auto lenders ask for.
Why Subprime Auto Lending May Be Better
Rent to own vehicle purchases can be great if you’re looking for fast auto financing with no credit check. But if credit building is a top priority, you may want to consider getting financing from a subprime lender instead. Because rent to dealers typically don’t look at your credit, they may not report your loan or on-time payments to the credit bureaus. This means that all of your timely loan payments won’t improve your credit score. Learn more about credit scores via https://en.wikipedia.org/wiki/Credit_score.
Subprime Lenders Check Your Credit But Can Help Your Repair Your Score
Subprime lenders, on the other hand, check your credit and report loans and on-time payments to the credit bureaus. This gives you a chance to improve your credit. Subprime lenders, like Car Loans of America, can also be seen as a better option because they may not have as large of a down payment requirement. This may be easier on you! Especially if you’re on a tight budget. You don’t have a trade-in to use as a down payment!
What Can a Subprime Auto Loan Give Me That Rent to Own Can’t?
- Help Build Your Credit
- Alleviate the financial stress that comes with an auto purchase
- Approved Financing Regardless of Credit
Consider Car Loans of America for Your Bad Credit Auto Loan Needs
Car Loans of America has been helping consumers with poor credit get the auto financing they need for 25+ years! We work with all credit levels and offer bad credit car loans at affordable rates that are simply non-comparable. Our in house financing will get you into the car of your dreams. Whether you have questions about rent to own cars, auto refinancing or getting a car loan with bad credit, we’re here to help!