How Does Rent to Own Cars Work in South Africa
What is called rent to own in South Africa?
Rent to own, also called rent to buy, is a lease agreement in which a property is rented for a defined period of time with the option for the renter to purchase the property at the end of that period.
How does rent to own cars work in South Africa?
An upfront payment is made at the beginning of the rent-to-own contract agreement and this upfront payment is allotted to the car purchase price. The weekly or monthly payments includes the car rental cost and a large percentage is the option fees that is added to the upfront payment for the car purchase.
What are the pros of rent to own cars in South Africa?
1. You are able to terminate your rent-to-own deal at any time, and usually, this is without any consequence unless you’ve paid a deposit.
2. Some rent-to-buy deals allow you to upgrade your vehicle after 18 months.
3. These deals usually offer the latest models of cars, with basic insurance, roadside assistance, and tracking devices.
What are the cons of rent to own cars in South Africa?
1. The car can be repossessed by the lender if you default on payments at any point because the rent-to-buy products are unsecured.
2. You risk losing all of the money you’ve paid, including your deposit and monthly payments, if the rent-to-buy items are repossessed or if you end your contract prematurely.
How much down payment should I put on a car?
It’s recommended to make a down payment of 10 to 20 percent on a car.
What documents is required to apply for rent to own cars in South Africa?
1. Copy of ID/Passport document.
2. Copy of Drivers Licence.
3. Proof of Residence, not older than 3 months.
4. Recent Salary Advise (Payslip).
5. 3 Months Bank Statement.
