Information on Rent-to-Own Vehicles

Many businesses offer consumers the ability to make monthly "rental" payments on goods with the money going toward the cost of purchase. This concept has traditional been applied to furniture, household appliances and home electronics, but has recently gained traction with vehicles.

Function

According to industry organization SEADRA, rent-to-own arrangements allow customers to make monthly rental payments on a vehicle with the ability to own the car's deed when the rental period ends. Some rent-to-own programs include limited engine and drive-train warrantie.

Features

A pilot program launched by Wal-Mart with LIVE X Auto Exchange in October 2009 allowed customers to rent preowned vehicles for $69 with a minimum commitment of four weeks. Bayou Auto Sales in New Iberia, La. had a similar program in 2007, keeping 15 to 20 percent of the payment as profit while the rest would go toward the purchase of a vehicle.

Warning

In a presentation to the American Association of Motor Vehicle Administrators in 2009, Missouri Department of Revenue Special Agent Jim Mead said that rent-to-own vehicle programs can have several hidden fees tacked on to the overall cost such as forcing customers to purchase insurance through the dealer. In addition, a dealer can shut off a car through an installer GPS tracker device and reclaim it if a rental payment is late by even one day.

References

• SEADRA: Lease-To-Own: A New Way of Selling Cars!
• RTO Online: Wal-Mart Launches Rent to Own Pilot Program
• RTO Online: Bayou Auto Sales Sees Success With Rent to Own System
• American Association of Motor Vehicle Administrators: Rent to Own Car Rentals

Resources

• RTO Magazine