Lease to Own Car Vs. Leasing a Car

lease to own car dealership agreementWhen dealers offer a service, like lease to own car or rent to own car programs, a lot of Americans tend to confuse it with the conventional lease program. Which is wrong!

A lot of consumers feel that since the word, ‘lease’ is added to the phrase, ‘lease to own vehicle’ then it means it is similar to lease to own. This is not true, as they are both different.

The only similarity may be that they both involve regular payments, apart from that, they are different like the South Pole is far from the North Pole.

The contracts seen in leasing to own and leasing are totally different. That’s not all, as the differences are also shown in the varying car options and clients that they both take care of.

Lease to Own Car Programs and Bad Credit

When we look at leasing program, we can be sure that a lot of financing companies frown at those with bad credit. If a person with poor or no credit comes to a dealership for the leasing option, there is a great chance that he will be turned down.

They feel that a person with a poor lending option won’t be able to make payments. Lease to own programs are also called rent to own car programs. They are designed for those that have poor to own car pros and cons

Why is this so? Aren’t they scared of not recuperating their money? Far from that.

The lease to own car dealers have requirements for someone who wants an auto loan, though the credit rating is not among.

The lease to own vehicle company would expect that the person has a source of income that is regular, provide proof of accommodation, contact and especially identification. Using a lease to own car dealer can really help to boost your credit rating, which can be likened to killing two stones with a bird.

Many of them send the loan and payment report to the Credit bureau, which in turn, improves their credit rating. A lot of persons with bad credit see it as a second chance, as they can both have access to a vehicle and increase their ratings.

Lease to Own Car Dealers

A lot of the lease to own car dealers usually carry out in-house lending, meaning that they don’t bother to make use of third-party lenders. Since they have this option, they see no reason they should get involved in running a credit check before financing can be done.

Traditional leasing companies, on the other hand, needs the applicant to have great credit. Many of them state the minimum amount of good credit that a person must have before the application is approved. This doesn’t mean that there haven’t been cases of those with bad credit been approved, but it is almost impossible.

If a lessee has a poor credit rating and is approved, he will be given a very high rate, far higher than what those with good credit rating get.

lease to own vehicle purchasing and optionsLeasing to Own Means Buying the Car

If one says that leasing means buying a car, then the person is wrong. Its counterpart, leasing to own means purchasing the vehicle. A lot of persons do not understand how this correlates; let’s explain rent to own car buying.

Once a person buys a car, he or she is given the title of the car. In the case of a lease to own car, you are only given the title of the car once the term is over.

Ensure you have made the last payment on time.

As for leasing, this isn’t possible. You aren’t given the car even after making the last payment, except you and the dealership alter the agreement. The dealer may decide that you pay a fixed amount to claim the vehicle.

In lease to own car agreements, as long as you are regular in your payments, and follow the terms in the contract, the car becomes your own once the term ends.

You won’t be stopped if you decide that you don’t want to be a party of the contract again. One thing that you should know once you make this decision is that you lose every payment you have made in the past. You won’t be refunded any amount.

When you decide to lease a car, every payment that you make is meant to merely use the car for the period of the payments, none of it is meant for the purchase of the vehicle.

Leasing vs. Lease to Own Car Pros and Cons: What Cars to Expect

If you decide that you want a rent to own option, you may have to deal with a used car. Quite a few used car dealership lots designate used car options to those with poor credit ratings.

Calm down; it’s not what you think.

At Car Loans of America, we ensure that you only have access to lease to own lots with the best used car options.

Many of the cars that one can have access to are those, though old, some mileage on them. This means that depreciation is low on to own car shopping is easy

One thing that a lot of consumers don’t know is that their brand new cars depreciate quickly immediately bought. It depreciates a lot more in those few years than when old.

This means that a used car doesn’t depreciate as much as a new car. A great win for lease to own car dealers.

If you have no problem with making payments regularly and having a brand new car, leasing may do the trick for you. One thing that you should be ready for is you must have an excellent credit rating.

For those with bad credit problems, a rent to own car program is something that you should consider opting for because no financing company will want to take the risk.

One thing that should be noted is that it isn’t an affordable venture. Before you opt for a rent to own car dealer, it is important to find out if they report both loan and payments to the Credit bureau. If they don’t, this means that the payments won’t affect your credit score.

Car Loans of America can link you up to those lease to own car dealers that report their loans and payments, hence improve your credit rating.

lease to own vehicle credit scoreImproving Your Credit with a Bad Credit Car Loan

A poor credit rating shouldn’t be seen as the end of the world, as financing that car can give you the credit repair advantage that you need. With a bad credit car loan, all you have to do is pay on time, and you are good to go.

Are you scared that you may be rejected for auto financing? Car Loans of America is ready to help. What we will do is to link you with those dealerships around you that offer the package you seek. This way, you rest assured that your application won’t be rejected.

Opting for our services is free, meaning that a dime won’t be lost. To proceed, try and input your details in our online application. Every detail you input there is private and will solely be used in matching you with the right lenders.

What are the Differences Between Leasing a Car and Lease to Own Car Programs?

For Ownership

Leasing: Making payments do not mean that you own the car. Or, you will own the car after the payments are completed. What happens is that you return it after the term. If you want to buy it, you will have to carry out another set of negotiations.

Lease To Own Vehicle Programs:

You can only own the car once the payments are made. Once you meet the dealer, you will be told how

much is expected and for how long. Other conditions must be kept in the term. Once you keep to them, you own the car. You can then customize it the way you wish.

Down Payments


When you lease a car, you will be expected to make these payments:

lease to own car down payments

  • The security deposit that is refundable if nothing happens to the car
  • Taxes
  • Down payment
  • Payment for the initial month
  • Registration fees and a host of other fees.

Lease To Own Car Programs:

What is expected of you are mostly taxes, down payment, registration fees. Though, they may vary from one organization to another.

It is possible to have access to an auto loan that lasts longer. You may have to pay a lot in interest and fees to the extent that you get negative equity on that car.

Monthly Payments

rent to own car payment optionsLeasing:

In a lot of situations, the amount paid on the lease is usually lesser than the amount that would have been paid if one had opted for lease to own car. How is this possible? In the leasing company, you are mainly paying for the depreciation on the vehicle.

Lease to own car programs:

The amount that you pay as low payments usually ends up being greater than leasing. Why is this so? Since you have the intention of owning the vehicle, you are paying its whole price.

Early Termination


lease to own car pros and cons of buying

If you decide that you are tired of the lease before it expires, you don’t just merely return the car. You will be expected to part with what is called, ‘early termination fees.’ This means that since you broke the agreement, there is a penalty that you have to face.

The early termination fees are usually as expensive as remaining put for the lease’s term to expire. In the case of leasing, breaking it is a case of penny wise, pound foolish.

Rent to own car:

You can decide that you don’t want a part of the agreement and all you have to do is to trade it in.  Especially true if you have not defaulted on a payment with the rent to own car option. On the other hand, you sell off the car and use the money to pay the auto loan off.

Rent to Own car Options:

Vehicle Return


Once the lease ends, you are meant to return the car. You have nothing else tying you the car! You can jump to the next lease agreement and a new vehicle.

Lease to own cars:

Once you are done making the payments, you can decide to sell it, or trade it in if you want to get a new one. It is that simple. Why not contact Car Loans of America today?



The future worth of the vehicle is not your concern as a lessee, and what this means is that you have absolutely no equity on it. This means that you can’t use the car to procure a loan.

Lease to own vehicle:

This option means that the vehicle will depreciate, but it won’t depreciate as a new car would because use cars’ depreciation rate is reduced. If it were a new car, the depreciation rate would be high in the first few years, especially the first year, but after the few years elapse, the car won’t be depreciating like before.

Can you customize your vehicle or rent to own car?


There is no leasing company that would tolerate their clients messing up the car after use. They want the car to still remain in the optimum state to allow them to resell it after the agreement ends.

lease to own vehicle ideas and informationWhat this means is that many leasing companies frown against all types of modifications. If you have a leasing company that allows a bit of modification, then you will be expected to strip the car of them after the lease comes to an end.

When you damage the car, in any way, you will pay extra for it. Or, if the modifications you made are permanent, you will pay for them.

Rent to Own Car:

Many of rent to own car companies allow you to make modifications to the car, but you have to inquire first.

Whatever you do to the car, ensure you make your payments on time, or you may be penalized. While the rent to own car dealer may allow you to alter the car, it is sensible that you do it in such a manner that the worth won’t be reduced.

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