What Happens at the End of a Rent-to-Own Agreement?

A rent-to-own agreement offers a flexible alternative to traditional car finance, as they give people the opportunity to use a vehicle day-to-day and work towards ownership at the same time — all without the commitment of a long-term finance agreement. The key way in which rent-to-own agreements differ is that you still make regular payments throughout the rental period, but during this time you accrue points which can later be used to reduce the cost of buying the vehicle.

If you're in a rent-to-own agreement, or if you're thinking about taking one out — you may be wondering what happens when this ends. The good news is that there are several options depending on your budget, circumstances and plans for the future, so whether you want to purchase the car, prefer to keep renting, or simply need a little longer to think about things — understanding the process can help you to make the right decision with confidence.

The Three Paths at the End of Your 17-Week Term

There are three main paths available at the end of your 17-week rent-to-own agreement term; these are:

Purchase the Vehicle

The first option is to buy the vehicle — this could be a good choice if you enjoyed using it in the rental term and if you're financially able to. You can also use the points which you've accrued during the rent-to-own term to reduce the final purchase price.

Return the Vehicle

You may have decided that the car wasn't right for you, or perhaps your circumstances have changed — if this is the case, it's simple to hand the vehicle back in line with your contract terms.

Extend the Agreement or Try Another Vehicle

Depending on what your provider allows and what options, you may be able to take a little more time to consider what you want longer-term or try out another car. This can be handy if you have an uncertain future situation in terms of location or finance, or if you're still working out the best type of car for you.

Whichever of these options is right for you, it's worth discussing with your provider to work out what is possible and how to get the right outcome for your requirements.

What Happens to Your Reward Points and Bond

Throughout your agreement, reward points will be accrued — this is a system designed to help you purchase the vehicle at the end of the rent-to-own term. Rather than lose the money which you've contributed in rental payments, the points can help to lower the final purchase price, making it easier and more affordable to own the car.

If you've paid a bond or deposit at the beginning of your rent-to-own agreement, as long as you have stuck by the terms of the contract and the vehicle is returned in the agreed condition, your bond will be returned or applied towards the purchase price of the car if you're buying it.

Using Points, Part-Points and Cash to Buy Your Car

A great advantage of a rent-to-own agreement is that you have flexibility when purchasing the vehicle at the end of the term — if you have accrued enough points, they may significantly reduce the cost for you to buy — in some cases, customers cover the whole payment in points. If your points don't quite cover the full amount, it's still possible to combine them with cash — meaning that you still benefit from your rental payments.

What if You're Not Ready to Decide Yet?

It's not uncommon to reach the end of your agreement and be undecided — your situation could have changed, or you may simply want a little longer to work out what is right for you. If you find yourself in this situation, speak to your provider before the agreement ends to find out what options are available to you. It may be that you extend your current contract, explore a new vehicle, consider a long-term car rental while you weigh up your options, or find an alternative suitable solution. It's best to remain open and communicative with your provider to avoid any uncertainty.

How This Compares to a Traditional Lease End-of-Term

At the end of a traditional car lease, you typically return the vehicle unless you have entered into a purchase arrangement. When it comes to rent-to-own agreements, they are designed with ownership in mind. Accruing points can create a clear pathway to vehicle ownership whilst still allowing for flexibility if buying the car doesn't turn out to be the correct decision.

The ability to have flexibility offers reassurance, and rather than being locked into a single outcome, there are several options available. Whether you're ready to buy the car and use your points, decide to return the vehicle, or simply want a little extra time to decide — rent-to-own agreements can be flexible and offer a gateway to ownership without the immediate commitment.