Can You Rent to Own a Car With Bad Credit in Canada?

Can You Rent to Own a Car With Bad Credit in Canada?

Posted on March 17, 2022

Rent to own dealerships often market themselves to people with less than perfect credit scores. But do they make financial sense? How do they compare to a Flamborough bad credit car loan?

Let’s find out!

Rent to own

Rent to own works in a similar way to an auto loan but is often for used cars. A dealership will sell you a car, you pay the dealership direct on a weekly, bi-weekly or monthly basis and at the end you own the car.

The payment includes principal and interest so you’ll own the car at the end just like you would with a car loan.

The advantages of rent to own is that they are marketed at those with poor credit and will often not require a credit check. You also end up owning the car, which is an advantage over leasing.

The downsides are the higher interest rate. You may also have to pay more often and some dealerships charge application or agreement fees on top of interest.

Rent to own is mainly for used cars so you will have less of a warranty and potentially higher running costs depending on the age of the car.

Bad credit car loans in Flamborough

Bad credit car loans are standard simple interest car loans. They are also aimed at those with less than perfect credit scores. You pay a lender or auto finance company instead of the dealership usually on a monthly basis.

The bad credit car loan payment will include principal and interest so you will own the car at the end of the term.

The advantage of bad credit car loans is that they are available for new and used cars, they more closely resemble loans you may already be familiar with and are regulated.

The downsides of a bad credit car loan are a higher rate of interest than a standard loan.

That interest may be less or similar to the rate charged in a rent to own deal.

Which is best rent to own or bad credit car loan?

The best option depends on your situation. If you’re comfortable with buying a used car and paying a dealership directly, it can be a viable way to drive a ‘new’ car.

If you would prefer the security of working with an auto loan company or lender, perhaps a bad credit car loan might be better. It is certainly better if you would prefer to only pay monthly or want to buy a new car.

We’re not exactly unbiased here as we offer bad credit car loans and not rent to own but we genuinely think loans make better sense.

The auto finance industry is regulated, you are protected by a whole series of laws, you can buy new cars, you can settle a bad credit car loan early and overpay if you like.

We think those reasons alone make a bad credit car loan a much better option for the majority of people than rent to own.

We will use all our skill and experience to deliver the lowest possible Flamborough car loan rates, guaranteed. Contact Car Nation Canada Direct to learn how we can help.

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