Rent to Buy or Take Vehicle Finance?

Rent to Buy or Take Vehicle Finance?

The reality is that a car can be expensive to own. This is largely owing to a range of factors, such as fuel expenses and depreciation among others.

Other expenses associated with owning a car include:

  • Parking
  • Insurance
  • Cleaning
  • Licences, fines and tolls
  • Fuel

Fortunately consumers now have a number of options when it comes to buying a car or renting one. When comparing rent-to-buy or vehicle finance options, it’s important to understand the two processes.

Finance options that are often available include:

Instalment Sale Agreement:

The Instalment Sale option is when the vehicle is purchased from the dealer, or private seller, but the bank owns the vehicle until you have finished paying it off.

After payment of the final instalment, you get full ownership of the vehicle.

Lease Sale Agreement:

Clients get to lease a vehicle, with the option to buy the vehicle at the end of the agreement. They can enjoy the use of the vehicle without outright ownership. Lease payments may also be tax deductible.


This option gives clients the chance to rent a vehicle on a specific long term contact and to become the owner of that vehicle after a specified period. Financial institutions give you the choice of acquiring any make/model with the colour and performance of your choice. As a client, you can pay a monthly amount which will be used to offset the cost of the vehicle.

Rent-to-buy vehicle options look only at your affordability. It does however require a deposit to be paid upfront. Monthly repayments are usually fixed for the duration of the rental period. It’s important to pay your leas on time every month and to keep the car well-maintained and serviced.

If you would like to buy your car earlier than initially agreed upon, a purchase price will be calculated for you.

A further benefit of rent-to-buy options is that you have access to a wide selection of quality vehicles and the costs are far lower than choosing to take vehicle finance.

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