Rent-to-own cars, also known as rent-to-buy, provide an alternative path to vehicle ownership for those who may struggle to secure traditional car finance. As the name suggests, rent-to-own allows you to rent a vehicle and then buy it at the end of the agreement. Unlike a traditional car rental, where you hire the car for a set period and then return it, with rent-to-own every payment goes towards the purchase price of the car. At the end of the contract, ownership transfers to you. However, until the final payment is made, you are effectively borrowing the car.
To secure the car, you will need to pay a deposit or setup fee, and then make regular payments over the agreed rental period. These payments are often weekly, though some providers may offer fortnightly or monthly options too. The payments may include other car-related costs, such as insurance, registration and maintenance costs – though some providers may require you to cover these costs separately.
Who is rent-to-own suitable for?
Rent-to-own car agreements are open to anyone but are particularly useful for those who may struggle to secure a traditional car loan. This could be:
- People with bad credit or no credit history who may not meet standard lending criteria.
- Self-employed workers or those with irregular income who find it difficult to prove stable earnings.
- New and temporary Australian residents who may not qualify for car finance due to their visa and lack of credit history in Australia.
- People receiving Centrelink benefits who need a vehicle but may face challenges with traditional lenders.
Can I get a rent-to-own car with no credit check?
Yes. Many rent-to-own car providers will not require or perform a credit check, as it is not a traditional loan product and you are not borrowing any money. While some may check your credit file, they typically focus on your current ability to make regular payments rather than your past credit history. This can make rent-to-own an accessible option for people with lower credit scores who may find it difficult to find long-term finance like car loans. However, you will still need to meet certain eligibility criteria, which may include:
- Being at least 21 years old (many providers have higher age requirements than loan providers).
- Holding a full, valid driver’s licence.
- Demonstrating a stable income to afford ongoing payments.
- Providing supporting documents such as bank statements.
How much will my rent-to-own car cost?
The cost of a rent-to-own a car depends on factors such as the car’s size, model, age and mileage, as well as the provider. Here's what you could expect to pay:
Weekly rental costs: weekly rent typically ranges between $120 and $300. Here are some example prices from Australian providers (prices correct as of March 2025):
- CarCoop: From $189 per week
- Rent Wize Cars: From $129 per week
- Auto Ownit: From $154 per week
- Freedom Cars: From $120 per week
Security deposit or set-up fee: this varies by provider, but will typically range from a few hundred dollars to $2,000.
Servicing, registration and insurance: these are often included in the rental costs, but it's important to check the contract to see what you are responsible for. According to the Australian Automobile Association, in Q4 2024, the average weekly costs for car ownership across Australia were:
- Registration, CTP and licensing: $32.29
- Servicing and tyres: $35.73
- Insurance: $50.26
- Roadside assistance: $2.45
These expenses can add significantly to your overall costs if they aren’t included in your rent-to-own agreement.
Balloon (residual) payment: in some cases, you will need to pay a final lump sum to complete the car purchase. This amount varies depending on the provider and contract terms, and could be a set amount or a percentage of the purchase price. In many cases, longer agreements have lower or no residual payments, while shorter terms may have higher residuals.
Example scenario
Sarah recently moved to Brisbane on a four-year 482 working visa. She needs a car for work, and while she earns a stable salary, her limited Australian credit history and temporary visa status have made it difficult for her to secure a car loan from a mainstream lender.
To get on the road quickly, she opts for a rent-to-own agreement through a local provider in her area, choosing a small, used car to keep costs manageable. She pays a $1,000 deposit upfront and agrees to weekly payments of $180 over three years. These payments include registration and servicing costs throughout the rental period. At the end of the contract, Sarah pays a $500 residual fee to take full ownership of the car. In total, she pays $29,580.
Cost breakdown: $1,000 deposit + $28,080 in weekly payments ($180 × 156 weeks) + $500 residual = $29,580
The pros and cons of rent-to-own cars
Pros
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No or minimal credit checks
Approval is often easier for those with bad credit or no credit history as providers typically focus more on affordability.
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Bundled costs
Rent-to-own agreements may also cover car registration, insurance and servicing costs in your payments.
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No interest
Unlike car loans, rent-to-own agreements work on a fixed payment structure without the added cost of interest.
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Easy access to a car
Rent-to-own provides a simple route to owning a car when other options aren't available.
Cons
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No ownership until the end of the agreement
You remain a renter until the final payment is made and the title is transferred to your name.
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Limited availability and usage restrictions
Your vehicle options may be restricted by location and the provider’s selection, and agreements often impose limits on where you can drive the car and how it can be used.
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More expensive overall
Total costs, including rent and fees, can be significantly more than what you’d pay with a standard car loan.
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Higher age requirements
Many rent-to-own providers require drivers to be at least 21 or older and hold a full driver’s licence.
Rent-to-own vs car loan
When looking to buy a car, two common options are car loans and rent-to-own agreements. While both help you get behind the wheel, they work in very different ways. Here's how they compare:
| Rent-to-own | Car loan | |
|---|---|---|
| Vehicle choice | Limited selection from the provider | Use any dealer or private seller |
| Loan term | 1–4 years | 1–7 years |
| Age requirement | Typically 21+ | 18+ |
| Availability | May be restricted to certain areas | Nationwide |
| Credit requirements | No credit requirements, making it an accessible option for those with bad credit | Typically requires good to fair credit – though bad credit options may be available from specialist lenders |
| Upfront costs | Usually requires an upfront deposit or setup fee | No deposit required in most cases, though application fees may apply |
| Ongoing payments | Weekly, fortnightly or monthly rental payments that go towards ownership | Regular repayments with interest charges and potential monthly fees |
| Additional costs | Agreements may include insurance, rego, roadside assistance and maintenance | You are responsible for all running costs |
| Ownership | Ownership transfers only after final payment | You own the car from the start |
Rent-to-own cars can be a lifeline for those struggling to get approved for traditional car finance. But are they the best option? On the surface, it seems like an easy choice – minimal credit checks, straightforward approvals and simple rental payments.
However, even with some of the running costs included, rent-to-own can end up more expensive than a car loan.
Let’s go back to Sarah from earlier. The small, used car she buys through her rent-to-own agreement has a market value of $14,000. While she initially opts for rent-to-own due to her visa status, limited credit history and trouble finding a lender, a car loan could still be an option.
This time, Sarah uses a car finance broker to help her explore her options and support her through the process, settling on a car loan with a 15% interest rate over three years. The loan includes:
- A $200 application fee
- A $10 monthly account fee
- A total loan amount of $14,200 (car price + application fee)
With these terms, her estimated repayments would be:
- $116.52 per week
- $504.92 per month
- Total cost over three years: $18,176.88 (including interest and fees)
As this example shows, rent-to-own isn’t your only option, and even with poor credit, you may be able to secure a loan.
Savvy has helped thousands of Australians with bad credit secure car loans. Even if you’re unsure about your eligibility, it’s worth comparing costs to find the best option for you. Getting a quick, obligation-free quote through us won’t affect your credit score and could lead to a more affordable path to car ownership.
