If you have a poor credit score or can’t afford to shell out the cash necessary right now to buy a car, then your best bet is to look for rent-to-own options. Rent-to-own cars allow you to secure a ride without needing to go to the bank for a loan and spending a lot of money upfront. If you have a poor credit score or no credit score at all, you might not get the best car loan which means that you’ll end up paying a higher interest rate. This makes rent-to-own deals look like the better option.
What is Rent-To-Own?
Rent-to-own deals allow you to buy a car by paying for it in monthly payments until you’re able to buy out the car fully. One of the benefits of a rent-to-own car is that you can get one without a credit check, all you need to show is proof of identity, residence, and income. Payments are typically made on a weekly or monthly basis to the car dealership directly and there are no interest costs. You’ll need to make a deposit.After paying monthly or weekly sums for a period of time, the car will become yours! This makes it the perfect option for someone who needs a car but can’t afford to buy it upfront or has a poor credit score.
How is Rent-To-Own Different from Leasing?
Rent-to-own is quite similar to leasing except that at the end of the renting period, a portion of your payment will go towards buying out the car in full. With leasing you’ll most likely be taking a loan out from a credit provider. If you have bad credit, then chances are you won’t get a sweet deal on monthly payments for leasing, or worst-case scenario, you won’t get any deal at all. Leasing can be an economical option for someone who wants to switch cars every couple of years, however, it still requires a good credit score.
Benefits of Rent to Own
– You don’t need to have a superb credit score to qualify for a rent-to-own vehicle since the approval rates are higher. This makes qualifying for a rent-to-own vehicle easier than qualifying for a bank loan.
– You get to own your vehicle at the end of the rental term provided that you’ve made all of the necessary payments and bought the car out at the end of the rental period. If you wish, you can also buy the car out at any point during your rental period.
– There are no interest rates. You only pay for the total price of the vehicle in monthly or weekly payments over a period of time. That’s it. It’s important to keep in mind that late payments do incur extra fees.
How can I sign up for rent-to-own cars?
At Planet42, we strive to make securing a car as affordable as possible. We know that getting a car for an affordable price can be challenging. Because of this, we’ve partnered with over 600 car dealerships selling new and pre-owned vehicles across South Africa and provide rent-to-own deals to South African individuals. All you need to do is find a suitable car for you from one of our dealers and fill in an application indicating your name, income, ID number, and contact details. We will review your application in one minute and then, if you are successful, will buy the car from the dealer and rent it out to you. You can become the owner of the car by purchasing the vehicle from us at any point during your rental period or for R5000 after renting with us for 60 months or more.
Where can you find budget-friendly rent-to-own cars?
We have partnered with over many car dealers all across South Africa. These dealers offer budget-friendly rent-to-own cars and there are plenty of options available for any need, taste or style. Below are a few dealers that we work with that sell budget-friendly rent-to-own vehicles in South Africa.
- Optimal Auto in Boksburg offers a good selection of budget-friendly vehicles.
- Auto Deal in Brakpan
- Willow Crest Motors in Randburg
- City Wheels in Pretoria
- CMH Ballito in Durban
- And many many more!
How much can I afford to spend on a rent-to-own car?
There are many more options out there. Getting in touch with Planet42 will help you figure out which vehicle is best for you. By submitting an application, you’ll be notified of the price range available to you. You’ll then be able to search on the websites of the car dealers partnered with Planet42 and narrow down your car search even more. You can think about what kind of a vehicle you might need, which features are important to you, and how much you can afford to spend on running costs like fuel, maintenance costs (these depend on the age of the vehicle, how much it has been used before and what you use it for now. For example, if you frequently drive in the city, then maintenance costs may be lower. Conversely, if you often drive on dirt roads then these costs may be higher), insurance costs, and of course the monthly payment amounts.
Typically you’ll want to spend no more than 20% of your annual income on car-related expenses. It’s important to factor in all of the possible expenses that come with renting or owning a car, not just the monthly payments to the dealer. This ratio should help you determine how much you can afford to spend on car-related expenses monthly and narrow down your search for a budget-friendly car to ones that are within your price range.