What Is a Lease to Own Program?

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Megan Foukes is a recent graduate from Indiana University who graduated with a bachelor’s in journalism. Megan works as a content writer for Auto Credit Express and contributes to several automotive and finance blogs.


, - June 17, 2019

Lease to own programs, sometimes referred to as rent to own programs, aren’t the same as traditional car leasing. Although it has "lease" in its name, you need to know that lease to own and new car leasing feature different contracts and offer different vehicle choices.

In fact, the dealer holds the car’s title in a lease to own program until you make all the payments, at which point the vehicle is yours, since the payments go toward buying the car. In regular leasing, the lessor holds the title, you never own the vehicle, and you have to return it at the end of the lease unless you choose to buy it.

Who Offers Lease to Own Programs?

Lease to own programs are designed for car buyers dealing with credit issues, and are offered at lease to own, or buy here pay here, dealerships. These dealers finance in-house, which means you can sign and drive in one place. When you sign a lease to own contract, you agree to make each payment on time. Once the contract is paid in full, you own the vehicle at the end of the term.

However, you need to be cautious with these types of programs. Some lease to own dealerships don’t report payments to the credit bureaus. If you’re new to the credit world and want to use a car loan to help build credit, a lease to own program may not work for you.

Qualifying for a Lease to Own Program

Now that you know what a lease to own program is, how do you qualify for one? It’s fairly simple, actually. In-house financing dealers, for the most part, don’t run credit checks. Instead, these dealerships base approvals on what you make. So, you could have no credit history, or very poor credit, and still get approved for financing.

Each dealer has different income requirements, but they typically require that you make at least $1,500 to $2,000 a month before taxes. Bring in a recent computer-generated pay stub showing year-to-date earnings, or bank statements and tax returns if you’re self-employed, to provide proof of income.

They also typically require a down payment, but how much you need to put down varies. The down payment requirement generally depends on the vehicle you choose. If you can't afford the down payment on a particular car, you may want to consider something less expensive.

Considering a Lease to Own Program?

Lease to own programs aren't for everyone, but if you’re considering one of them, or are wondering which dealer can get you started in the financing process, we want to help.

At CarsDirect, we work with a nationwide network of dealerships that know how to handle bad credit car buyers. All you have to do to get started is fill out our auto loan request form, and we’ll get right to finding a local dealer for you!

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Megan Foukes is a recent graduate from Indiana University who graduated with a bachelor’s in journalism. Megan works as a content writer for Auto Credit Express and contributes to several automotive and finance blogs.


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