Bankruptcy clients generally want the same thing: get back into a good financial situation with a good credit rating. We know that car loans after bankruptcy can play a huge role when rebuilding your credit, but what about rent-to-own vehicles? This type of financing could be beneficial in some aspects and not beneficial in others. We will explain below.
What is a RTO Car and What are the Benefits?
A rent-to-own car is a vehicle that is offered to bad credit consumers who have past bankruptcies or repossessions under an agreement to pay for the car for the length of time they have it; much like leasing. The major difference between the two is after you make the last payment you now own the vehicle instead of turning it back into the dealer.
The major benefit to a RTO program for bankrupt buyers is that there is no credit check involved. Usually the only requirements of these types of programs are proof of residency, proof of income, and a down payment. Once you meet those requirements and choose the car of your liking you then will pay weekly payments to the dealer and after the last payment is made the vehicle is yours; free and clear.
What are the Cons to a Rent-to-Own Program?
As we stated above most rent-to-own companies don’t to a credit check which means they also typically don’t report to the three credit bureaus with your payments. Therefore, even if you make your payments on time each week your credit rating will not reflect that. This poses a real problem when coming out of bankruptcy because the goal is to better your score to be able to get auto financing after bk; or any financing for that matter.
Luckily, here at BankruptcyAutoFinancing.com we work with subprime lenders that will give you your best chance at an auto loan approval regardless of your credit score and past or present bankruptcies. Their programs don’t involve RTO vehicles and they report to the credit bureaus helping you to fix your bad credit.
So, if you’re ready to get started on the road to a better financial situation with a new car loans fill out and submit our quick and easy application today.
Remember, we are not lawyers and cannot give legal advice. The situations discussed are only our experiences throughout the years and may vary with each customer.