Everyone has heard the term rent to own. You can rent to own a home, appliances and even cars. But how exactly does rent to own work? At MLT we offer a variety of low mileage vehicles on a rent to own package.
You will be required to pay a deposit, the amount of which is dependent on the type of vehicle you are interested in renting. The term is over 36 months. You will also have to bring along an additional R300 for a verification- this amount is non-refundable.
There is no bank financing involved. This means that the only factors that are considered are whether you can afford the monthly instalment and upfront administration fee. In addition, traditional vehicle finance from a bank is linked to the country’s interest rate. If the interest rate increases so too do your monthly repayments.
Banks generally charged much higher interest rates for car loans than for most other loans, especially when compared to home loans. With a rent to own car finance option you will be paying a fixed, interest free payment each month for the duration of your contract.
In return you will have access to high-quality pre-owned cars, which are thoroughly checked by qualified mechanics. At the end of the rental period with a nominal buy-out fee, factoring in the upfront administration fee that you paid at the beginning of the contract period, you will get to own your car. This makes rent to own a cost-effective option for most people.
While rent to own may be an easier way to own your own vehicle, you need to carefully consider your monthly expenses and overall budget to make sure you can in fact afford the monthly repayments. Similar to the terms and conditions of a bank, your car will be repossessed if you do not pay the monthly installments.
Furthermore, some rent to own car companies cap the amount of mileage you may travel. So depending on what you want to use the car be it for work purposes, running your own business or just for your own personal use, you need to ensure the monthly distance you travel is factored into your lease agreement.
Interested in one of our rent to own packages? Please don’t hesitate to contact one of our three branches today.