If you’re finding it tough to secure a traditional car loan in Melbourne, rent-to-own can provide a straightforward way to get on the road. Whether for personal or business use, rent-to-own lets you access a vehicle quickly without the usual credit checks.
How does buying a rent-to-own vehicle work in Melbourne?
Rent-to-own lets you buy a car through regular rental payments, gradually paying down the car’s cost and becoming the owner once the final payment is made.
When you sign up, you’ll need to pay an upfront deposit or setup fee to secure the vehicle. The rental agreement will then run for an agreed set term, usually one to four years, and may include other running costs like insurance, registration, maintenance and roadside assistance.
Providers usually offer a variety of vehicles for personal and business use, including utes, motorbikes, vans, SUVs, sedans, and more. However, your choice is limited to the provider’s current stock. While you may be able to find the type of car you want – whether that’s a small hatchback for zipping around Melbourne or a rent-to-own truck for on the job – you might have to be flexible with make and model.
These arrangements are especially appealing to people who need a car quickly but face difficulty securing traditional finance. Because it’s a rental agreement rather than a loan, credit checks usually aren’t required for rent-to-own. This makes it a good option if you have bad credit or no credit history but need fast access to a vehicle. It’s also suitable for businesses struggling to secure finance due to limited trading history or upfront capital.
Can a rent-to-own vehicle be delivered to you anywhere in Victoria?
Where your vehicle can be delivered in Victoria – and if it can be delivered at all – depends on the rent-to-own provider that you choose.
Unlike a car loan, where you can get financing to buy a vehicle from any seller across Australia, rent-to-own providers are often smaller businesses operating within limited geographic areas. Because they physically supply and manage the vehicles instead of just lending money, their service area tends to be less flexible and more limited, often focused on urban areas like Melbourne.
Many providers will require you to pick up the vehicle in person from their location or an agreed pickup point. However, some offer local or even statewide delivery across Victoria, especially if they have a wider network, which may be more common for business vehicles.
Is rent-to-own a good option for getting a vehicle in Victoria?
There are a number of rent-to-own providers operating across Melbourne and surrounding areas, giving Victorian drivers options if traditional finance isn’t available.
Rent-to-own can be a convenient choice for both personal and business use, particularly for people who have been declined for a standard car loan. Because many providers do not rely on traditional credit checks, it can allow access to a vehicle when mainstream lenders won’t approve finance.
The application process is also usually faster and more straightforward than applying for a car loan, allowing you to get on the road quickly.
However, rent-to-own is not the only pathway to a vehicle. Even if you don’t qualify for a standard car loan, there may be other ways to finance or access a car in Victoria, including:
- Bad credit car loans: personal car loans designed for borrowers with a poor or limited credit history.
- Low-doc car loans: loans that require less income documentation and can suit self-employed borrowers looking for a business vehicle.
- Car subscription: a different type of rental arrangement where you pay a regular fee to use a vehicle without owning it.
- Small loans: flexible, unsecured loans up to $5,000 that could help cover the cost of a vehicle.
- Good Shepherd No Interest Loans (NILs): interest-free loans up to $5,000 that offer eligible Australians a way to purchase a vehicle.
What to watch out for with rent-to-buy cars
While rent-to-buy can make it easier to get into a car, there are some important details to be aware of.
These agreements are usually more restrictive than other finance options like a car loan. Your choice of vehicle is limited to what the provider has in stock and there are often rules around how far you can drive, where the car can be taken and how it can be used. If you plan to use the vehicle for rideshare or delivery work, for example, you’ll need to check this carefully, as many providers don’t allow or insure for commercial use.
The vehicles themselves are typically older used cars with higher kilometres. That doesn’t mean they’re unsafe, but it does mean you’re less likely to get the same range, condition or features you would when buying on the open market.
You also don’t own the car until the final payment is made. If you fall behind on repayments, the provider can take the vehicle back and you may lose the car along with the money you’ve already paid.
Finally, rent-to-buy can be significantly more expensive overall. While the weekly cost may be affordable, you may end up paying much more than the car’s market value and more than you would through other ways of buying a vehicle.
Before signing, it’s important to read the terms and conditions carefully and compare rent-to-buy with other options so you understand the true cost and risks.