If you have bad credit and have been turned down for car finance, one alternative is rent-to-own. Under this arrangement, you make regular payments to use the car, gradually reducing the amount you owe on the car. At the end of the term, you can take ownership of the vehicle.
While most rent-to-own car agreements require a deposit or set-up fee at the start of the contract, one of the major advantages is that there’s usually no credit check when you apply. This can make it an appealing option if you’ve had trouble with your credit in the past, offering quick and easy access to a vehicle for personal or business use.
How to get a rent-to-own car without a credit check or deposit
When you apply for a rent-to-own car agreement, the provider will do a quick check of your finances to make sure you can afford the weekly rental payments – but while they might assess your income, they will not typically perform a credit check. Even if they do, your score will have a minimal impact on your application.
This is because, unlike a car loan, with a rent-to-own car agreement you are not actually borrowing money. Instead, you’re renting the car over a fixed term, with the option to buy it later. As long as you can show you can afford the ongoing costs, you may be eligible, even if your credit history is less than perfect.
However, most agreements do require an upfront payment or deposit before you can get behind the wheel. This can range from a few hundred to several thousand dollars depending on the car and provider, so it’s important to factor this into your budget.
Once you’ve been approved and the deposit is paid, your agreement begins. You make regular payments over an agreed term of typically between one to four years. The payments cover the vehicle rental and, in some agreements, other costs like registration, insurance and scheduled servicing. At the end, you can take ownership of the car.
If you’re a sole trader or small business who needs a vehicle but can’t access traditional finance, Savvy can help you explore rent-to-own options for commercial vehicles.
While we don’t currently offer rent-to-own for personal use, we can help you compare bad credit car loan options that may be available based on your circumstances.
What types of cars are available with rent-to-own agreements?
Rent-to-own providers typically offer a rotating selection of vehicles. These can include hatchbacks, sedans, SUVs, utes, vans, people movers and other light commercial vehicles that are suitable for personal use, business use or even rideshare work.
Your choice will be limited to what each provider has in stock at the time, so you may need to be flexible if the exact make or model you want isn’t available. Vehicles also tend to be older, used models rather than brand-new cars.
Availability also depends on your location. While rent-to-own cars are available across Australia, you'll need to choose from what's in stock in your area. For example, if you’re looking for rent-to-own car options in Sydney, you’ll need to work with a provider based there.
When you might apply for a rent-to-own car agreement without a credit check or deposit
Rent-to-own agreements are open to anyone, but they can be particularly appealing to people with bad credit or no credit history due to the lack of credit checks involved.
They can also be a helpful option if you’ve been turned away by traditional lenders or don’t meet the strict criteria for a car loan. For example:
- You have recent defaults, missed repayments or a history of bankruptcy
- You have no established credit history, such as if you’re a recent arrival to Australia
- You’re a sole trader or small business owner who needs a vehicle but can’t access traditional finance because you have no trading history.
Even though your credit score won’t be under scrutiny, you’ll still need to show that you can afford the ongoing rental payments. This usually means having a steady income – and you’ll also need to have the funds saved up to pay the deposit or set-up fee at the start of the agreement.
No credit check rent-to-own for business owners
Rent-to-own agreements can be a practical solution for business owners who need a vehicle but face barriers to traditional finance. With minimal to no credit checks and relatively low upfront costs, this option is often especially suited to businesses that:
- Are newly established and lack sufficient trading history
- Don’t have the upfront capital to purchase a vehicle outright
- Experience credit challenges that make standard business loans difficult to obtain
This arrangement helps improve cash flow when funds are tight, gives you access to a reliable vehicle when you need it and provides tax-deductible payments that can ease your overall business expenses. It also offers the opportunity to build equity in the long run by gradually paying toward eventual ownership of the vehicle.
If you’re looking for a flexible solution tailored to your business needs, Savvy can help you find the right business rent-to-own option to get on the road quickly, connecting you with providers offering simple, affordable agreements without credit hurdles.
What happens if I fall behind on payments?
If you miss a payment, your provider may offer a short grace period, but late fees are usually charged. These will be outlined in the contract you signed at the start of the agreement. Continued missed payments can lead to the car being repossessed – either temporarily until you catch up on payments or permanently if you default on the agreement.
Additionally, some rent-to-own providers install immobilisers on their vehicles. These devices allow the provider to remotely disable the car if payments fall behind, meaning the car won’t start or can’t be driven until the issue is resolved.
Are there other ways to get a car without a credit check or deposit?
While rent-to-own isn’t the only way to buy a car, most other finance options will require a credit check. Upfront deposit payments, however, are usually optional, which can be helpful if you don’t have any money to put down upfront.
Here’s a look at some alternative options for both personal and business use vehicles:
Personal use
| Option | Credit check required? | Deposit required? | Overview |
|---|---|---|---|
| Rent-to-own | No | Yes | Rental agreement with ownership at term end |
| Small loan | Sometimes | No | Small, flexible-use personal loan |
| Secured car loan | Yes | No | Loan to purchase a car, secured against the vehicle |
| Novated lease | Yes | No | Salary-sacrificed car lease through your employer |
| Bad credit car loan | Yes | No | Secured loan tailored for borrowers with poor credit history |
Business use
| Option | Credit check required? | Deposit required? | Overview |
|---|---|---|---|
| Rent-to-own | No | Yes | Fixed-term rental with payments toward ownership |
| Business car loan | Yes | No | Loan to purchase a vehicle for business use |
| Business car lease | Yes | No | Flexible vehicle leasing for business use |
| Low doc loan | Yes | No | Loan requiring less documentation, suited for self-employed or new businesses |
While credit checks are a standard part of the process in most cases, there are still options for people with poor credit or limited financials – so it’s worth exploring your options.
For personal borrowers, bad credit car loans can provide access to finance even if your credit score isn’t perfect. For business owners, low doc car loans can offer finance with reduced paperwork requirements.
While interest rates are generally higher for these loans, the overall cost can still be less than rent-to-own agreements.
Savvy partners with a wide range of specialist lenders that can help people with less-than-perfect credit get approved for car finance. With no hard checks until you decide to proceed with an application, you can explore your options and see what you may be eligible for without putting your credit score at risk.