Written by 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
Rent-to-own vs car loan
When looking for a way 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 | 18+ | Typically 21+ |
| 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 running costs included, rent-to-own can end up far 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 and limited credit history, she may also be eligible for a bad credit car loan from a specialist lender.
After exploring her options, Sarah settles on a bad credit 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 3 years: $18,176.88 (including interest and fees)
As this example shows, rent-to-own isn’t your only option. While traditional lenders may reject applicants with poor credit, specialist providers assess your current financial position rather than just your past history. A bad credit car loan can offer immediate ownership and, in most cases, a lower total cost.
Savvy has helped thousands of Australians with bad credit secure car loans. Getting a quick, obligation-free quote won’t affect your credit score and could lead to a more affordable path to car ownership. Even if you’re unsure about your eligibility, it’s worth comparing costs to find the best option for you.
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More of your questions about rent-to-own cars
If you miss a payment, your provider may allow a short grace period, but ongoing missed payments could result in the car being repossessed – either temporarily until payments are caught up or permanently if you default on the agreement. Some providers may charge late fees or offer repayment plans to help you stay on track.
Yes, you can often make extra payments, such as a larger deposit upfront to reduce ongoing repayments or shorten the rental term. Some providers may also allow early repayment of the car in full, but fees might apply if you pay it off before the agreed rental period ends.
Most rent-to-own agreements last between one and four years, though this varies by provider. Some may offer terms up to five years. A longer term usually means lower weekly or monthly payments, but it also increases the total amount paid over time.
Unlike a traditional car loan where you can purchase from any dealer or private seller, with rent-to-own your vehicle choices are limited to the provider’s stock. However, there will typically be a selection of vehicles on offer, including compact cars, sedans and SUVs from popular manufacturers. These may be new or used cars that have passed strict roadworthy checks and hold a current Roadworthy Certificate (RWC).
Some providers allow you to visit their site to browse available cars and take a test drive before committing.
While rent-to-own and novated lease agreements both require you to complete the contract before you can take ownership of the car, they operate in fundamentally different ways.
A novated lease is a salary packaging arrangement where your employer deducts car lease payments from your pre-tax income, reducing your taxable earnings. The payments function more like a car loan, involving interest payments and fees. At the end of the lease, you can return the car, extend the lease or buy it outright.
In contrast, a rent-to-buy agreement is independent of your employer and is paid from your post-tax income. It’s typically designed for those who may not qualify for standard car finance.
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